Online Gambling in Pennsylvania

pa state sealPennsylvania is the most-likely state to follow New Jersey, Delaware and Nevada in legalizing some forms of online gaming. New Jersey and Delaware already have online poker and casino games, while Nevada now has real money poker sites operating for residents.

In October of 2017, Pennsylvania joined the party when the state legislature approved of a major gambling reform bill to legalize online casino games, online poker and even online sports betting if the federal prohibition of sports wagering is ever repealed. The October 2017 bill also formally legalized daily fantasy sports and enacted regulations to govern the industry.

Legal Pennsylvania Betting Sites

Fantasy Sports:

Betting Site

Horse and Greyhound Betting:

Betting Site

Governor Wolf signed the bill into law on October 30th, 2017. There are still some issues to iron out regarding tax rates and licensing conditions, but overall things are looking very good for online betting in Pennsylvania.

Past Efforts to Legalize Online Gambling in Pennsylvania

So many online gambling bills have been introduced in Pennsylvania that it’s difficult to keep track of them all. The frequent attempts to pass pro-gambling legislation made us increasingly optimistic as time went on. The thinking went that eventually, something would have to stick. For these reasons, we ranked Pennsylvania as one of the seven states most likely to legalize online gambling in 2017.

All legislation detailed below is dead today, but we figured it would be better to leave these overviews up rather than delete them outright. It’s interesting to look back at previous efforts and see that excessive tax rates and licensing fees are not a new thing in Pennsylvania. Note that this is not a comprehensive list of every bill ever proposed in Pennsylvania. We’re just sticking with the biggest bills that appeared the likeliest to pass at one point.

2013: House Bill No. 1235                                                                                         

Full Text

Representative Tina Davis introduced House Bill No. 1235 a couple of times. The bill called for the legalization and regulation of online poker and casino games such as blackjack, slot machines and so on. A previous iteration of the bill included burdensome licensing fees and taxes. At one point, the bill required a licensing fee of $16,500,000 per operator and a 45% tax rate on the industry.

She reintroduced the bill in 2013 with considerably lower fees and taxes. The 2013 edition asked for a $5,000,000 license fee and a 28% tax rate. These updated rates brought Pennsylvania more in line with what we’re seeing in other states.

Overall, the bill was fairly lenient. It did not include a “bad actor” clause, which means sites such as PokerStars and Party Poker would be able to return to Pennsylvania and apply for licensing. The bill included an allowance for Pennsylvania to join interstate pacts with other states that legalize internet gaming. What this means is poker sites in Pennsylvania would be allowed to share player pools with poker sites operating in other states, thereby increasing the overall player pool for everyone.

The rest of the bill goes on to describe the measures that will be taken to ensure gambling remains fair, safe and free from the influence of crime. This bill was referred to the gaming oversight committee in April of 2013 and never came back.

2014: Senate Bill No. 1386

Full Text

Senators Edwin Erickson and Bob Mensch introduced SB 1386 in June of 2014. Like the previous bill, this one paved the way for legalizing and regulating online casino games and poker. This bill too called for a $5 million licensing fee.

SB 1386 did contain several key differences. First, it proposed a tax rate of just 14%. Second, this one did include a bad actor clause. What that means is any gaming companies that accepted wagers from the United States after 2006 would be forever prohibited from offering their services in Pennsylvania.

Additionally, licenses would only be issued to existing brick-and-mortar operators in Pennsylvania. These operators could team up with 3rd party software providers, but all online operations would have to be promoted and marketed under the brand of the brick-and-mortar establishment.

2015/2016: House Bill No. 649, SB 900

HB 460: Full Text

SB 900: Full Text

HB 649 was first introduced in February of 2015 and hung around throughout part of 2016. This law wanted to direct the Pennsylvania Gaming Control Board to create regulations, license operators and monitor licensees.

HB 649 would allow brick-and-mortar casinos to apply for licensees for an $8 million fee and give them the ability to partner with existing online gaming providers who can provide the technology and expertise to take brick-and-mortar casinos to the digital realm.

State Representative John Payne, chairman of the House Gaming Oversight Committee, told Trib Live in January of 2016 that he believes the state will find the potential income from legal online casino games too irresistible to pass on.

“Look, we need revenue,” he said. “They’re not going to find votes for taxes in an election year. So I would think gaming will be a component.”

One bill introduced in 2015 even proposed a ridiculous 54% tax rate for online gaming revenue. The tax rates specified in SB 900 were seen as ridiculous at the time, but unfortunately that bill did set the stage for high tax rates in the 2017 bill that was later approved by the House and Senate.

2017 Bills

A pair of identical bills were introduced in the House and Senate in 2017. Those bills called for poker sites and online casinos to apply for licenses at a cost of $8 million up front and $250,000 per year thereafter. Technology providers would likewise be subject to hefty taxes and fees: $2 million up front and $100,000 per year thereafter.

These two bills also called for a tax rate of 16%, which was much, much better than what some other proposals have called for. Neither bill made it into law, but they did set the stage for what would come later.

Shortly after those two bills were proposed, a third bill came out of nowhere courtesy of state Senator Jay Costa. His massive bill consisted of 200+ pages of regulations that would ultimately legalize gambling as well as formally legalize fantasy sports. The problems with this bill included taxes and fees. This one called for a $10 million licensing fee for gambling sites, $5 million for software providers and a tax rate of 25%.

Horse Racing Betting

Online horse racing betting is legal for residents of Pennsylvania. Federal laws allow each state to determine the legality of horse betting and most states allow residents to bet on horse races online. All of the nation’s largest horse betting websites have a presence in the state.

Where to Bet on Horses in Pennsylvania

All of the following racing betting sites accept customers from Pennsylvania. Each of the sites listed below is headquartered in the United States and holds a license to offer real money bets on horses and greyhounds.

Pennsylvania is also home to six live racing venues that accept wagers on races. Horse racing in the state is regulated by the Pennsylvania Racing Commission under the Department of Agriculture. Here’s a look at the six racetracks that call PA home.

Mohegan Sun at Pocono Downs

1280 Highway 315
Wilkes-Barre PA 18702

Harrah’s Philadelphia

777 Harrah’s Blvd.
Chester, PA 19013

Hollywood Casino at Penn National Race Course

777 Hollywood Blvd.
Grantville, PA 17028

Parx Racing

2999 Street Road
Bensalem, PA 19020

Presque Isle Downs

8199 Perry Highway
Erie, PA 16509

Meadows Racetrack Casino

210 Racetrack Rd.
Washington, PA 15301

Fantasy Sports

Fantasy sports betting is exempt from all federal legislation because it is considered a contest of skill. A few states prohibit fantasy sports, but Pennsylvania has never moved to put an end to the activity. The largest daily fantasy sites have been operating and advertising in Pennsylvania for years now without issue.

Even so, lawmakers have made several attempts to pass legislation that would bring fantasy sports under the regulatory umbrella of the state. One of the most recent efforts was House Bill 865 introduced in March of 2017 seeking to give the Pennsylvania Gaming Control Board licensing and regulatory power over daily fantasy sports sites.

HB 865 includes all the standard types of regulations that have been put out by DFS legislation across the nation in recent years. Below are some of the most important provisions in the bill:

  • Give the Gaming Control Board discretion to issue/renew/revoke DFS operating licenses
  • Grant the Gaming Control Board authority to issue rules and regulations necessary for the enforcement of this law
  • Require licensed fantasy sites to underdo regular audits
  • Establish a licensing fee of $50,000 or an amount equal to 7.5% of the previous year’s revenues, whichever is less
  • Require fantasy sites to restrict play from people who may have conflicts of interest
  • Restrict players under 18 years of age from playing
  • Require fantasy sites to take reasonable steps to protect confidential information
  • Require fantasy sites to keep players’ funds in segregated accounts, not intermingled with the sites’ operational funds

That bill never made it into law, but the gambling legislation approved by the House and Senate in 2017 addressed daily fantasy sports in Pennsylvania once and for all. HB 271 made it clear that online fantasy sports are legal, provided operators pay for a license and adhere to basic regulations such as enforcing a minimum age of 18 to play.

How Fantasy Sports Sites Work

Fantasy sports betting is a whole different ballgame than traditional sports wagering. In a fantasy league, you are given a virtual salary cap which is used to draft players for your virtual team. Each player in the league is priced according to his perceived value. If you want to draft the best quarterback in the NFL, for example, you’re going to spend a good portion of your salary on that one player.

Once you have drafted your team, all you have to do is watch that week’s games. As your team’s real life counterparts amass stats in the real world, your fantasy team accumulates points online. The person whose team accumulates the most points wins the league.

You can compete against a single player in a heads-up match or join tournaments with massive prize pools. Each fantasy league only lasts for a single day or week so that each member of your fantasy team plays in exactly one game.

Fantasy sites in the United States cover the biggest pro leagues (NFL, MLB, NBA , NHL and PGA) in addition to college basketball and football. The goal in all fantasy leagues is to draft a well-rounded team, stay under the salary cap and rack up the most stats. If you win your competition, you win real money.

Sports Betting in Pennsylvania

Pennsylvania has emerged as one of the states most interested in exploring sports betting possibilities. Over the course of a single week in 2017, state lawmakers made two moves to bring real money sports betting one step closer to fruition.

First, there was the massive gambling overhaul passed in mid-October that declared live and online sports betting will be legal, taxed and regulated as soon as it becomes legal at the federal level. Federal law currently prohibits states other than Nevada from authorizing sports betting, but New Jersey’s efforts to challenge the prohibition in front of the Supreme Court along with growing popular support for legal sports betting have helped clear the way for states such as Pennsylvania.

Within days of the Pennsylvania House and Senate passing the gambling overhaul, Governor Wolf decided to allow the state lottery to begin offering virtual sports betting. Virtual sports betting is designed to look exactly like real sports betting but with the one obvious difference being that virtual sports games are never contested in the real world. The outcome is entirely random. Even so, the change shows a growing appetite for sports betting.

At the end of October 2017, Governor Wolf signed the online gambling bill into law to legalize not just online casino games, fantasy sports and online poker, but also sports betting. Pennsylvania can now get to work implementing the law, drafting regulations and issuing licenses for everything except sports betting.

The part of the October law referring to sports betting is still contingent upon the Supreme Court ruling that the federal prohibition of sports betting is unconstitutional. If the Supreme Court fails to do that, Pennsylvania will have to pin its sports betting hopes on Congress finally getting around to repealing the prohibition themselves.

It would also be helpful if lawmakers take a closer look at the law they just passed and consider easing back on some of the taxes and fees they want to take from sports betting. The Pennsylvania sports betting law calls for a $10 million licensing fee for sports betting operators as well as a 36% tax on revenue.

State Lottery

Pennsylvania has a state lottery and the major gambling bill passed by the House and Senate in 2017 authorized the state to sell lottery products online. The governor approved the bill days later to formally authorize the Pennsylvania Lottery to sell lottery tickets, instant scratch card games and keno online.

Shortly after the PA legislature sent that bill to Governor Wolf, the governor made a separate announcement that he would be authorizing the Pennsylvania Lottery to operate virtual sports betting terminals in authorized locations such as bars and taverns. The state lottery predicted that the change would result in up to $75 million in additional revenue over the next five years.