On June 22, 2016 the Pennsylvania General Assembly passed a sweeping expansion of gambling . The bill, which must be passed by the state’s Senate and signed by the Governor, would allow for internet based gambling, daily fantasy sports, slot machines at off-track betting parlors (“OTBs”), slot machines at airports and even paves the way for legalized sports betting, if, and when that is allowed under federal law.
- Pennsylvania would be the fourth state to allow legal internet gambling (Internet gambling is currently legal in New Jersey, Delaware and Nevada);
- Internet gambling would be offered through the Commonwealth’s current, licensed casinos with each casino paying an $8 million license fee to offer internet gaming;
- Age and geo-location controls will be required – players must open an account, be 21 or over and must be located within PA while participating in internet gambling;
- The tax rate on internet gambling revenue would total 16%;
- Participating casinos would not be allowed to reduce their number of slots machines their existing b casinos
Daily Fantasy Sports
- Bill allows current DFA operators like FanDuel and Draft Kings to obtain a license to offer DFS without partnering with a PA casino; DFS operators would pay 5% of its revenues ( after player payouts) to the state;
- DFS players must be 18 yo or older;
Slots at OTBs
- PA’s 5 racetrack casinos would each be permitted to have up to 4 off-track betting parlors with up to 250 slot machines per OTB;
- Each such OTB must be outside a 50 mile radius of an established PA casino;
- There is a $5 million licensee fee for each OTB with slots;
Slots at Airports
- Casinos can seek permission to install slot machines at airports; the PA Gaming Control Bd can set limits on the number of slot machines l allowed;
- License fees for such operations would be $5 million in Philadelphia; $2.5 million in Pittsburgh; and $1 million a each at the four other international airports in PA;
Expansion of Current Resort Casinos
- Current Category III casinos in PA can expand their max slot machines counts from 600 to 850 and table games from 50 to 65;
- There is also a relaxation in the requirement that casino patrons be customers of other amenities;
- If a current Category III casino and all three changes it so would requires $4.5 million is additional license fees.
- The bill instructs the PA Gaming Control Bd to develop regulations to allow for sports wagering if, and when the federal government permits such sport betting
Under a compromise reached by the New Jersey Senate and Assembly leadership the proposed state Constitutional amendment will be put to a vote in both bodies which would allow two additional casinos in the northern part of the state. Under the compromise current Atlantic City casino license holders would have and inside track and have six months to submit proposals to build the new casinos, and their plans must call for investing at least $1 billion in each facility.
If that criteria isn’t met, those without Atlantic City licenses can bid to build the new North Jersey casinos. They would also be required to invest at least $1 billion for each facility
It appears the proposed amendments will not be voted on in this current legislative session which ends on Tuesday, January 12, 2016 and 12:00 noon, but rather in the new session which begins thereafter. As such both the Assembly and Senate will be required to pass the amended proposal with 3/5th majorities for the proposed amendment to be on the November, 2016 ballot.
Just days following a proposed amendment to the New Jersey State Constitution proposed in the State Senate and as detailed here , the New Jersey Assembly offered its own proposed Amendment to the Constitution which would also authorize up to two additional casinos in North Jersey.
Both Amendments propose no more the two casinos, each located in different counties and outside a 75 mile radius of Atlantic City. The 75 mile radius restriction eliminates Monmouth Park Racetrack as a possible site for casino expansion.
The primary differences are as follows;
- Applicant eligibility: The Assembly version of the proposed amendment allows one of the two licenses to be awarded to an applicant with no current ownership or ties to an existing Atlantic City casino. The Senate version of the amendment limits eligibility to (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or (2) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey. The Assembly version only applies the Senate version’s proposed eligibility requirements to the “initial license.” The current Atlantic City casino tie-in eligibility requirement presumably does not apply to the second license awarded.
- Tax Allocation to Atlantic City. The Assembly version of the proposed Constitutional Amendment allocates 35% of state tax revenuers from the two new casinos for purposes if the recovery, stabilization or improvement of Atlantic City. The Senate version allocate 49% of such tax revenue for the recovery, stabilization or improvement of Atlantic City.
The Senate and Assembly must agree on an identical version of the proposed Amendment which would have to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes, twice over two years. The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.
A Proposed Amendment to the New Jersey State Constitution will authorize two additional casinos in the State. The details of the Proposed Amendment are as follows:
- No more than 2 casinos, each one to be located in different counties in State
- New casinos must be located outside a 75 mile radius from Atlantic City.
- Eligibility for the license is limited to:
- (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or
- or (2 ) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey
- Tax rate to be determined in subsequent legislation. 49% of such tax revenue for 15 years is dedicated for recovery , stabilization or improvement of Atlantic City. 2% of tax revenue dedicated to thoroughbred and standardbred horsemen.
- The Resolution has to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes twice over two years. The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.
A copy of the proposed amendment can be read here: SCR 185.
On February 12, 2014, the Pennsylvania House of Representatives’ Gaming Oversight Committee held a hearing to receive testimony regarding the prospects of legalizing electronic gaming devices, i.e video gaming machines, in the Commonwealth. The hearing focused on gaming along the lines of what was raised in a prior session’s bill, (2014 House Bill No 1932), which sought to legalize video gaming machines for bingo, keno, blackjack and other games for use in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels and clubs.
With a looming budgetary deficit Pennsylvania legislators are exploring various ways to increase gaming related tax revenue, including potentially moving forward with internet gaming through its existing bricks and mortar casinos. This recent Gaming Oversight Committee hearing revisiting the video gaming machines issue would be another means through which to generate gaming based tax revenue. The hearing’s witnesses touted the jobs and tax revenues generated by Illinois which implemented video gaming machines in bars, restaurants, taverns and truck stops several years ago – (projected IL tax revenues in excess of $250 million in 2015). While Illinois has had success generating tax revenue and producing jobs with its video gaming machine roll out, the machines do compete, on a low end basis with the states’ existing casinos. While local municipalities in Illinois can opt out of the video gaming program that option may not exist in a Pennsylvania bill and opposition from Pennsylvania’s casino industry remains to be seen.
Also, if considering video gaming at bars and taverns Pennsylvania may be well served to learn from some of the mistakes made with the passage of last year’s Tavern games legislation. Tavern games, with its gaming regulatory scrutiny focused on the bars/tavern owners, rather than through the games’ owners and route operators, lead to cost issues and a reluctance to move forward which hampered widespread implementation of tavern gaming. In addition, while Illinois has had relative success with its multi-tiered system of manufacturers, distributors, operators and establishments, that system has one too many layers to operate as effectively as it otherwise could. Few recall Pennsylvania’s short-lived requirement of local suppliers of slot machines layered between the industry’s manufacturers and end user casinos. The removal of the local supplier requirement opened the way to the implementation of Pennsylvania casinos in 2006. Finally the Pennsylvania Gaming Control Board and its agencies are more than capable of regulating and rolling out video gaming should it become law. Bringing in other, less experienced state agencies, such as Liquor Control or the Department of Revenue would only further complicate and delay implementation should the law pass.
New Jersey’s Gaming regulators garnered attention this week by issuing a press release that they are accepting applications for skill-based games for play in New Jersey’s casinos. This was a friendly reminder to the industry of two things: (1) that the New Jersey Division of Gaming Enforcement’s current regulations already allow for skill-based elements in slot machines; and (2) the Division’s “New Jersey first” policy, whereby gaming products that are submitted for testing to New Jersey prior to, or simultaneously with, any other jurisdiction or testing lab, if approved, can be on the casino floor within 14 days.
Continue reading NJ Regulators Seeking Skill-Based Gaming – Possible iGaming Implications
Internet gambling is currently legal and operating in three, U.S. States – Nevada, New Jersey and Delaware. Additional states, perhaps realizing that the likelihood of federal legislation on the topic anytime soon is remote, considered their own internet gambling legislation this past year. Proposals for new, or expanded internet gambling have, or will likely be considered by California, Colorado, Hawaii, Iowa, Louisiana, Massachusetts, Mississippi, New Jersey and Pennsylvania.
Continue reading Ten States Consider Internet Gambling Legislation
Japanese lawmakers have submitted a bill to the Japanese Parliament which would legalize casinos in Japan. The bill, which apparently has cross party support, including from Japan’s ruling Liberal Democratic Party, is the culmination of recent momentum prompted by the 2020 Olympics being awarded to Tokyo.
Continue reading Japan Moves Toward Legalizing Casinos
The Pennsylvania Gaming Control Board announced that it is now accepting applications for the one remaining casino license that must be located within the City of Philadelphia. This is the former “Foxwoods” license which was revoked by the Board in December 2010. The Board set an application deadline of November 15, 2012.
In its announcement, Board Chairman, William Ryan stated that it was in the “best interest of the people of Pennsylvania” to proceed with the application process since it appears that recent legislation, considered by the Pennsylvania General Assembly, which would have amended the current gaming law and allowed the vacant license to be located anywhere within the Commonwealth, is unlikley to move forward.
The licesne fees to operate a casino with up to 5000 slot machines and 250 table games, totals $74.5 million.
On June 18, 2012, the New Jersey State Assembly’s Appropriations Committee moved forward a bill that would authorize internet gaming at Atlantic City casinos. The bill, which has been making its way through various committees in the State legislature, provides that all authorized casino games, including poker, may be offered through internet gaming, to players within New Jersey. So as to comport with the recent U.S. Department of Justice opinion and the federal Unlawful Internet Gambling Enforcement Act, the N.J. bill provides that to participate in internet gaming, a player must be physically present in New Jersey whenever a wager is placed, The bill does, however, provide that should the N.J. Division of Gaming Enforcement determine that wagers may be accepted from players outside of New Jersey, the legislation will allow such wagers. This provision gives the legislation the flexibility to expand the potential player base should there be a change in current federal law which currently would limit prospective internet wagering to intra-state based wagering.
Continue reading New Jersey Assembly Advances Internet Gaming Bill