Pennsylvania Online Gambling
Since the Pennsylvania gambling expansion law passed a year ago, you’ve been inundated with news about the new forms of Pennsylvania gambling. What folks have not heard though, is when it is going to actually happen.
But when are the online casinos coming? And when are you going to be able to place a sports bet?
When it comes to online casinos. we still do not have any firm dates for launch of any project. However, now that most online casinos and sports betting applicants have presented plans to the PA Gaming Control Board (PGCB), we do have some sense of when things are going to happen. It may be sooner than you realize too!
As for sports betting? That picture is much clearer. The first sportsbook plans to open on Nov. 17. The other books also can pinpoint launch dates within a couple of weeks. Check out our timelines for online casinos, online poker, and sports betting launches:
Projected launch dates for PA online casinos
|Casino||Online Gaming Partner||Online Poker Plans?||PGCB Approval Date||Projected Launch Date|
|Harrah's Philadelphia||888||Yes||Aug. 15||Q1 2019|
|Hollywood Casino||IGT||Yes||Sept. 12||Q1 2019|
|Mohegan Sun Pocono||Scientific Games||Yes||Not approved yet||2019|
|Mount Airy Casino||The Stars Group||Yes||Aug. 15||Q1 2019|
|Parx Casino||GAN||Yes||Aug. 25||2019|
|Presque Isle Downs||SB Tech||No||Oct. 31||Q1 2019|
|Sands Bethlehem||None||Yes||Oct. 3||Unknown|
|SugarHouse Casino||Rush Street Interactive||Yes||Sept. 12||Q1 2019|
|Stadium Casino||None||No||Oct. 31||Unknown|
|Valley Forge Casino||IGT/GAN||Yes||Sept. 12||2019|
Read more on PA online casinos
Projected launch dates for retail and online sportsbooks
|Casino||PGCB Approval Date||Retail Sportsbook Launch||Online Sportsbook Launch|
|Hollywood Casino at Penn National||Oct. 3||Nov. 17||Q1 2019|
|Parx Casino Sportsbook||Oct. 3||December 2018||Q1 2019|
|South Philadelphia Turf Club||Oct. 3||Q1 2019 (after Parx)||N/A|
|Rivers Casino||Oct. 31||Dec. 1||Q1 2019|
|SugarHouse Casino||Oct. 31||Dec. 1||Q1 2019|
|Harrah's Philadelphia||Oct. 31||Jan 2019||Q1 2019|
|Valley Forge Casino||Pending||N/A||N/A|
Read more on PA online sports betting
What did the PA gambling expansion bill legalize?
The PA Senate passed a bill to legalize online poker, online casino games, daily fantasy sports, and sports betting on Oct. 26, 2017. Gov. Tom Wolf signed it into law just three days later. The bill, H 271, enacts widespread gambling expansion that extends beyond just PA online casinos.
Here is a look at exactly what the bill authorizes and why changes may be on the horizon if the tax rates on some gambling expansion is not adjusted.
After months of back and forth on tax rates, license fees, VGTs, mini-casinos, and other details, the bill the Senate passed permits:
- Online poker
- Online casino games (table games and slots)
- Daily fantasy sports
- Tablet gaming in certain areas at authorized airports
- Video gambling terminals (VGTs) at qualified truck stops
- 10 mini casinos
- Alterations to Category 3 casinos (removes membership fee, permits more slots – requires one-time fee)
- Online lottery sales
- Sports betting now that PASPA was overturned
Additionally, the changes in the laws resulted in SugarHouse Casino dropping its lawsuit blocking the Stadium Casinos LLC group from building its planned casino in Philadelphia’s Stadium Park. With legal issues gone, the group quickly ponied up the money for a Category 2 license and are moving forward with construction.
Tax rates and licensing fees
Tax rates and license fees for online gambling have been major bones of contention for months.
After a 54 percent tax rate on slots was floated earlier this year, more recently the figure settled into a more-reasonable mid-twenties range. By comparison, the effective tax rate in New Jersey on online slots is 17.5 percent.
The amended version of H 271 returns to that steep 54 percent number. PA would tax the products as follows:
- Online table games and poker: 14% + 2% local share = 16%
- Online slots: 52% + 2% local share = 54%
- Sports betting: 34% + 2% local share = 36%
- Daily fantasy sports: 15%
Distinct licenses for each product
H 271 establishes three separate licenses:
- Online slots
- House-banked games
- Online poker and other peer-to-peer online games
Operators were required to purchase a license for each vertical they intended to offer. For $10 million, PA casino operators could purchase all three in a bundle. Nine of the 13 eligible casinos chose to do that:
- Stadium Casino
- Mount Airy
- Sands Bethlehem
- Hollywood Casino
- Valley Forge
- Harrah’s Philadelphia
- Rivers Casino
- Sugarhouse Casino
Casinos could also buy a la carte licenses for each vertical. Each license carries a $4 million price tag. So far, two casinos opted to do that. Presque Isle applied for table games and slot licenses. Mohegan Sun Pocono, on the other hand, surprisingly purchased all three at a premium of $12 million.
Meanwhile, in October, Rivers Casino actually rescinded its interactive application. This ups the number of available licenses to ten.
If the remaining 10 licenses are not claimed by existing PA casinos, the process to apply will open up to entities outside of Pennsylvania. The application process for outside entities begins on Oct. 15 and closes on Oct. 31.
Meanwhile, there are licenses and fee structures for the other gambling expansion elements as well. For example, the 10 mini casinos each carry a $7.5 million fee to offer 350-700 slots. Properties can pay an additional $2.5 million for a right to offer up to 30 table games.
However, that number only covers the license. The mini casinos also feature an auction process. The highest bidders among existing Category 1 & 2 casino license holders in the initial auction obtained a license to pick a qualified location for the property.
After four licenses, the bids dried up, so the process opened up to Category 3 properties. At that point, Category 1 and 2 casinos could bid on a second property. That is what Hollywood Casino did, bidding on a second property.
With five licenses remaining from the 10, outside entities can apply to bid, however, the PGCB has not discussed that possibility.
VGT licenses and fees
The contested video gambling terminal (VGT) legislation made it into the final bill. These machines are only allowed at truck stops that meet a range of requirements. Each truck stop can only have up to five machines. These are the licensing costs and feeds:
- Manufacturer/Supplier: $10,000
- Terminal Operator: $5,000
- Establishment: $250 per VGT
- Key Employee/Procurement Agent/Principal: $500
- Any other permit: Up to $100
The pitfalls of high taxation
Industry experts, including Moody’s, have decried the lofty 54-percent tax rate on slots, and for good reason. At that rate, operators will have little left over for marketing, customer acquisition, promotions, and other business-building tools. This could hamper the growth of the industry and thus depress the amount of tax revenue the state is able to generate.
PA already taxes its land-based slots more heavily than any other state in the nation, and only recently have PA casinos managed to break a lengthy slide in slots revenue.