Pennsylvania’s New Gambling Law Expands Industry

Pennsylvania's recent gambling expansion law is already yielding financial benefits for the state. However, questions about the long-term impact on the local gambling industry persist.

The new law, signed by Governor Tom Wolf, allows Pennsylvania casino operators to run online casinos and online poker sites, marking a significant expansion in the state's gambling landscape. Additionally, the legislation authorizes several other gambling initiatives:

• Online lottery sales
• Video gambling terminals (VGTs) at truck stops
• Tablet gambling in airports
• Ten satellite casinos

The law also eliminates a provision that previously required patrons to use other amenities at casino resorts before gambling. This change led Valley Forge Casino Resort and Mount Airy Casino Resort to eliminate fees for customers who only wanted to play slots, poker, or table games. Valley Forge Casino promptly paid a $1 million fee to the state to lift this requirement, updating its website to reflect the new, no-cost policy.

While the state benefits financially and at least one casino celebrates newfound freedom, not all stakeholders are pleased. Penn National Gaming, which operates Hollywood Casino at Penn National Race Course, has criticized several aspects of the expansion, particularly the authorization of satellite casinos, which they believe will hurt their business.

Critics have also voiced concerns about the legislative process, claiming the bill was rushed through. However, many of the measures had been debated for months prior to the final vote.

 

What does the future hold?

Even supporters of the law acknowledge it may need refinement. Chris Grove, a gambling industry strategist, expressed support for Pennsylvania's move towards regulated online gambling but noted potential areas for improvement. According to Grove, the state is projected to collect $120 million in upfront license fees and additional hundreds of millions in tax revenue. Nevertheless, he cautioned that Pennsylvania's high tax rates might hinder the growth of online gambling.

“Pennsylvania’s high tax rate will force operators to cut back on marketing and promotion, and could dissuade some consumers from leaving black market sites,” Grove said. He suggested that lawmakers might need to reconsider the tax rates to ensure a thriving market for both the state and the casino industry, which has already contributed significantly to Pennsylvania's revenue. Grove's position: