ONLINE NEWS
Pennsylvania House joins Senate in passing gambling bill
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ennsylvania has taken another step closer to becoming the fourth state in the US to legalise online gaming after its House passed a major gambling expansion bill. The House voted 109-72 in favour of the bill, which was also passed by the Pennsylvania Senate after
a vote of 31-19. Pennsylvania Governor Tom Wolf will have the final say on the bill and has so far remained tight-
lipped regarding his stance on internet gambling in the state. House Bill 271 would also allow for the creation of 10 mini casinos, as well as for truck stops to operate video gaming terminals (VGTs) and enable Pennsylvania airport passengers to play games on their tablet devices.
The online gaming section of the bill sets out plans for punters to gamble on their desktop, mobile or tablet while inside the state’s borders. In addition, if the bill gains final approval, Pennsylvania’s state lottery would be able to sell tickets online while daily fantasy sports operators could operate in the state, should Congress give clearance to such activities on a national scale. Joe Weinert, executive vice-president of Spectrum Gaming Group, said: “Aside from any state initially authorising casino gambling, this is one of the most aggressive gambling expansion bills we’ve ever seen.”
The bill would enable Pennsylvania’s existing commercial casinos to offer online gaming to punters, opening up licensing processes for slots, poker or other table games, or a mixture of all these types of gambling. Pennsylvania plans to tax internet games the same rate casinos currently pay for live play at their physical locations, with a portion of slots revenue earmarked for property taxes and other online games contributing to the general fund.
Paddy Power brand to withdraw from Italy
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addy Power Betfair has announced that is to withdraw its Paddy Power brand from Italy, but will retain a presence in the country through Betfair Italia. The
PaddyPower.it platform will shut down in December, with customers set to be migrated to
Betfair.it. Sources
suggest the decision to withdraw was made shortly after Paddy Power and Betfair
completed a merger last year. The operator’s 3.37% of online-only sports betting in Italy in September saw it break into the top 10 operators for online and retail sports betting, according to iGB’s most recent Italy iGaming Dashboard (paywall), despite not running a retail business in the territory. Confirmation of the exit comes amid reports of a potential tax rise for both land-based and online betting operators in Italy. Various sources in the Italian media have said the
current tax rate for land-based companies could rise from 18% to 19%, while online operators face a similar tax hike, with the rate set to increase from 22% to 23%.
Penn National slams “unworkable” Pennsylvania online slots tax
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asino operator Penn National’s interactive chief Chris Sheffield has criticised the 54% online slots tax in the Pennsylvania bill passed by the House and sent to
governor Tom Wolf’s desk for signature recently, calling it “the highest rate on the planet” and “completely unworkable”. Penn National is one of 12 existing land-based casino licensees in line to
receive one of the $10m licences to operate poker, slots and table games under the bill now awaiting Governor Wolf’s signature. Sheffield, SVP/Managing Director Interactive for Penn, told iGamingBusiness: “Obviously we are pleased that this has finally moved but 54% for online slots is the highest tax rate on the planet. It’s completely unworkable and the only reason one might buy a licence is to then begin an active lobbying effort to reduce the rate to where one might actually make money on the operation. “We’ve run the numbers many times, and just can’t see how they work given investment in licence fees, setup costs and ongoing costs. I really can’t see anyone making a return unless they are in for the very long term and its likely some early operators will bail out at some stage as has happened in new markets before.”
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Greentube’s president of market development in North America for igaming and social software Gabriel Cianchetto echoed Sheffield’s comments, stating that while the bill represented “progress” for PA, the currently proposed 54% tax rate for online slots meant “it could take years for any operation to turn a profit within the state.
“I expect that the smaller Pennsylvania casinos will sit this opportunity out due to the high barrier to entry,” he said.
Cianchetto also called the $10m licensing fee for casinos “a prohibitive amount” for most casino properties in the state. “Add to this the $4m licensing fee for technology providers and $1m for content providers and you have a prohibitively large capital expense before you anyone can even begin development”.
He also highlighted that the legislation as currently written required all technology providers such as Greentube to set up a separate infrastructure within the state, “despite the fact that viable infrastructure exists just over the state line in New Jersey. This required replication adds another prohibitively expensive step in what is already a very expensive venture for all parties involved,” he said.
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