With a hearing to discuss internet gaming scheduled for April 16, 2015, two Pennsylvania online poker bills have been introduced in as many weeks. HB 649 was introduced last week by Rep. John Payne, and this week, Rep. Nick Miccarelli has submitted HB 695. There are several notable similarities between the two measures, but two very prominent differences as well.
Comparatively speaking, HB 645 and HB 695 have a lot in common. Both bills would require a $5 million licensing fee upon start-up with a 14% tax rate on generated revenue. They would each legalize Pennsylvania online poker sites, where only businesses that currently hold a license to operate gambling in the state would be allowed to apply for an online gaming license. And finally, both would enforce strict penalties to thwart gaming on illegal offshore sites.
In great contrast, however, Rep. Miccarelli’s Pennsylvania online poker bill is just that – a bill to regulate online poker only. There is no room for other forms of legalized iGaming in HB 695. Rep. Payne’s measure, on the other hand, seeks to regulate a full regime of online gambling opportunities. Furthermore, in its original context, this latest iPoker bill would prohibit operators like PokerStars from joining in.
Rep. Miccarelli’s Pennsylvania online poker measure has a very strict ‘Bad Actors’ clause that seems to put a bulls-eye on the backs of brands like PokerStars. Not only would any operator who violated the UIGEA after 2007 be exempt, last year’s acquisition of PokerStars parent company, Rational Group, by the highly reputable Canadian-based firm, Amaya Gaming, wouldn’t alleviate the burden either.
The bill states that:
|The board may not issue a license to or otherwise find suitable any prospective licensee or significant vendor, or key interactive gaming employee of a licensee or significant vender, who has:
(i) accepted or made available wagers on interactive games using the Internet from persons located in the United States after December 31, 2006, unless licensed by a Federal or State authority to engage in such activity…
And goes on to define describe the following as “tainted assets” that are not eligible to apply for a Pennsylvania online poker license:
|(1) any trademark, trade name, service mark or similar intellectual property
(2) any database or customer list of individuals residing in the United States… with or through an Internet website or operator not licensed by a Federal or State authority…;
(3) any derivative of a database or customer list described in paragraph (2);
(4) software, including any derivative, update or customization of such software, or hardware relating to the management, administration, development, testing or control of the Internet website, the interactive games or wagers offered through the website or the operator.
Fortunately for online poker players in the Keystone State who are hoping to see PokerStars become available to them once more, Rep. Payne’s HB 649 is the more likely of the two to be approved. The fact is, the strongest drive behind regulation is the tremendous need for revenue generation.
In New Jersey, where the population is about 75% that of Pennsylvania and both online poker and casino games are legal, it’s the casino side of the market that’s contributing most to tax coffers. New Jersey iGaming generated $123 million in 2014, and the majority of that—$94 million in fact—came from online casino gambling. Only $29 million was derived from online poker games. With that in mind, it’s highly unlikely that Pennsylvania lawmakers would choose to regulate online poker without casino gambling in the mix.