Posts Tagged ‘Bill’

Online Gambling Bill Makes It Through Michigan House Committee

 Online Gambling Bill Makes It Through Michigan House Committee

A bill to legalize online gambling passed through a Michigan House of Representatives committee Wednesday and though it will be nearly impossible for it to advance any further during this legislative session, there is some hope for the next.

The Bill, House Bill 4926, was introduced by Rep. Brandt Iden three months ago. He told Online Poker Report (OPR) in October that he wanted to see it pass the House by Thanksgiving.

“Throughout the month of October, I’m hoping to gain a lot of headway,” Iden told OPR. “If I had my way, we’ll be able to get everyone to the table and put a bill together and through the House before the Thanksgiving holiday. We’ll see how achievable it is, but that’s my goal.”

Well, it clearly wasn’t achievable, as it only just now made it through a committee and the legislative session is about to end. The good news, though, is that in Michigan, bills can carry over to the next session, so Iden will not have to start from scratch.

The bill stipulates that prospective online gambling operators would be required to pay a $ 100,000 licensing application fee. If granted a five-year license, the fee for the first year would be $ 200,000 and then $ 100,000 each year thereafter.

In October, Iden told OPR that the biggest challenge was arguably getting all of the state’s tribes and the three commercial casinos to all agree on the legislation. Lawmakers could always go ahead and vote for bills without the blessing of all the stakeholders, but is generally a good idea to get those who may be operating the gaming sites to be onboard.

“They’re constantly looking to expand their operations with new gamers. They realize they have generations of gamers that are going to be looking at new platforms, and if they don’t get on board they will miss bus,” Iden said to OPR.

For this Michigan House Regulatory Reform Committee vote, Iden said that the committee did meet with stakeholders the day before in order to discuss the bill. The three commercial casinos – Greektown, MGM Detroit, and Motor City – all now apparently support the legislation when they did not previously (they supported legalized online gambling, just not the bill as written.

As first reported on Twitter by Gambling Compliance’s Chris Krafcik, there were two main amendments to the bill in committee. The first requires gaming servers to be located on the property of a licensed casino. Krafcik says this is important because it may put online gambling in sync with the Michigan constitution, which says that gambling must take place at a casino. Having the servers at a casino theoretically means that online gambling is occurring at the casino, in essence a new gaming offering by existing licensed operators, rather than an expansion of gambling.

The other change is an adjustment to the tax rate. The amended bill says licensees must pay a tax of 10 percent on gross gaming revenue, down from 15 percent previously.

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NJ State Sen. Ray Lesniak Introduces Bill to Expand Online Gambling Internationally

 NJ State Sen. Ray Lesniak Introduces Bill to Expand Online Gambling Internationally

One of online poker’s most fervent supporters in the political world, New Jersey State Senator Ray Lesniak, has one more trick up his sleeve before he retires. Late last week, Lesniak introduced a bill that would effectively allow New Jersey to enter into agreements with other countries in order to share player liquidity.

The bill, S3536, amends the portion of New Jersey law that legalizes online gambling. Most of the bill is what already exists, detailing the history of gambling in the state, the benefits of gambling (as well as regulation) for the state, and the legalization of internet gaming.

One of the key points of New Jersey’s online gambling law is that the gaming servers must be located in Atlantic City:

….all hardware, software, and other equipment that is involved with Internet gaming will be located in casino facilities in Atlantic City or in other facilities in Atlantic City owned or leased by a casino licensee and thereby considered to be part of a casino hotel facility that are secure, inaccessible to the public, and specifically designed to house that equipment, and where the equipment will be under the complete control of a casino licensee or its Internet gaming affiliate.

But then comes Senator Lesniak’s amendment. He starts by explaining that online gambling has been of great financial benefit to the state and that the market for internet gaming internationally is growing quickly:

In the coming years, the global online gambling market is expected to see a compound annual growth rate, and the largest share of online gambling revenue comes from Europe totaling nearly $ 15 billion a year and growing at a faster rate than the rest of the world; and

Since its inception under P.L.2013, c.27 (C.5:12-95.17 et al.), Internet gaming has resulted in economic benefits to Atlantic City and to this State, and is estimated to have produced, within the first three years of implementation, approximately $ 998 million in economic output, over 3,000 jobs, $ 219 million in employee wages, and $ 124 million in tax revenues, of which $ 84 million derive from Internet gaming revenue alone. The provisions in this act, P.L. c. (C. ) (pending before the Legislature as this bill), permitting Internet gaming equipment to be located outside of the territorial boundaries of Atlantic City if necessary to facilitate the conduct of international wagering, would increase the economic benefit of Internet gaming to Atlantic City and to this State.

And then, right near the end of the bill, comes the kicker, “The division may permit Internet gaming equipment to be located outside of the territorial boundaries of Atlantic City if the division deems it necessary to facilitate the conduct of international wagering permitted under this section.”

Thus, if this bill passed, poker players located in New Jersey would presumably eventually have the ability to play on sites not based in New Jersey. One would assume the New Jersey regulators would have to approve of individual operators and come to agreements with regulators in other countries. When this happens and the player pools of international sites merge with those of New Jersey, player traffic would jump, hopefully attracting more and more players and, in turn, generate more tax dollars for the state.

The current New Jersey legislative session ends January 9, 2018, so Lesniak has a month if he wants to see the bill passed while he is still a Senator.

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New Hampshire Online Gambling Bill Quickly Shot Down

 New Hampshire Online Gambling Bill Quickly Shot Down

Two weeks ago, I wrote an article titled, “New Hampshire Online Gambling Bill in Play.” Well, it isn’t anymore. Halloween was truly a day to realize our fears, as in an Executive Session, the New Hampshire House Ways and Means Committee unanimously struck down HB 562, a bill which have legalized online gambling in the state.

This wasn’t entirely unexpected, as it was probably a longshot that the bill would pass, but seeing it demolished so definitively is a bit eyebrow-raising.

HB 562 was originally introduced on January 5th and quickly referred to the House Ways and Means Committee. It had a public hearing and then an Executive Session (essentially a committee meeting to deliberate the bill) in February, but that was it.

All of a sudden in mid-October, though, a new Executive Session was scheduled for the bill. At the end of the session, the committee members would submit a report to the Clerk of the House denoting “Ought to pass,” “Ought to pass as amended,” “Inexpedient to legislate,” “Refer to interim study,” or “Re-refer to Committee.”

The first two options were the good ones, the third – Inexpedient to legislate – the very bad one. And guess what was submitted to the Clerk by a 23-0 count? Yup. The baddie. Online gambling is now dead in New Hampshire until next year.

Even had the bill passed committee and eventually made headway on the floor of the House or even the Senate, regulations still needed to be hashed out. HB 562 was really just a skeleton bill with the majority of the text in just one paragraph:

This bill exempts gambling done over the Internet from gambling offenses under RSA 647. The Department of Justice to date has neither investigated nor prosecuted online gaming offenses and therefore does not expect this bill to have any impact on expenditures. To the extent this bill legalizes a form of gambling, it may have an indeterminable impact on lottery and charitable gaming revenue. Lottery and charitable gaming revenue is credited to the lottery fund, with net revenues after Lottery Commission expenditures being credited to the state education trust fund.

Going back a few paragraphs, I should amend my statement that “Online gambling is now dead in New Hampshire until next year.”

That is not exactly true. Online poker and casino games are, but in July, the state legislature passed a bill to permit online lottery ticket sales. No tickets have been sold over the internet yet, but they will start early next year. An optimist might think that if online lottery sales do well and the lottery commission is successful with its regulation of them that it might make lawmakers more confident that online poker regulations could work.

New Hampshire would certainly have to form an internet gaming compact with other states if online poker even becomes legalized, though. With an estimated 1.3 million residents, it is less than half the size of Nevada, which can barely support one online poker room. New Jersey recently decided to merge player pools with Nevada and Delaware and Pennsylvania, which last week legalized online gambling, is expected to do the same. If online gambling ever becomes a reality in New Hampshire, the state would have to join forces with other states.

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Pennsylvania Governor Signs Online Gambling Bill

 Pennsylvania Governor Signs Online Gambling Bill

After last week’s frantic activity in the Pennsylvania state legislature, we expected this to happen, but nonetheless, it is a relief that on Monday, Pennsylvania Governor Tom Wolf signed the gambling expansion bill that will, among other things, legalize online gambling, including poker.

The Pennsylvania Senate passed HB 271 on Wednesday by a 31-19 vote and the House passed it Thursday morning, 109-72, sending the gambling bill to Governor Wolf’s desk. It was expected he was sign it and he did not disappoint in that regard, announcing at the Pennsylvania Press Club luncheon in Harrisburg on Monday that he did so.

Now legal in Pennsylvania are online poker, online table games, online slots, daily fantasy sports, and internet lottery sales. The law also authorizes tablet gaming areas in airports, video gaming terminals (VGTs) at qualified truck stops, and ten “satellite casinos.”

The topic of VGTs was particularly divisive, as the Senate for a long time did not want to allow them at all, as there was fear that a) VGTs would take business away from casinos, and b) they simply expanded gambling too far. The Senate eventually compromised with the House and VGTs were allowed at truck stops, a more limited expansion than the bars, restaurants, and private clubs that the House wanted.

As for online poker, the twelve land-based casinos in the state will get the first chance to apply for licenses. The application will be pricey: $ 4 million for online poker alone. Online table games and online slots require separate licenses at the price of $ 4 million each, as well. If a casino applies for all three licenses within 90 days, it can save money and pay $ 10 million total.

The tax rate will be 14 percent on gross gaming revenue plus an additional 2 percent local tax. That works fine, though the $ 4 million fee just for applying for a license could make some casinos and potential operators balk.

The biggest problem with the bill, as we have discussed before, is that the tax rate for online slots is the 2 percent local tax plus – get this – 54 percent on gross revenue. That’s right. Online slots will be taxed 56 percent. More than half. It was widely considered that this – combined with the separate $ 4 million application fee – will kill this part of the industry before it even starts.

New Jersey online gambling is taxed in the teens and the operators barely make a profit on slots. Yet supporters of the 54 percent (plus 2 percent) tax cite the same tax on brick-and-mortar casinos as the reason why online casinos should have no problem with it. They fail to understand, though, that physical casinos have revenue streams from restaurants, hotel, and shopping to lean on, while online operators have none of that.

We’ll see how that plays out. In the meantime, the wait now starts for online poker to actually launch in Pennsylvania. There is a 60-day waiting period before anything can start, but realistically, it will probably take the better part of a year to get things up and running, as all the regulations have to be put in place, operators need to be vetted, etc.

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Pennsylvania Senate Passes Online Gambling Bill

 Pennsylvania Senate Passes Online Gambling Bill

Earlier this month, it looked like the chances of online poker legalization were dead in Pennsylvania for the rest of this year as state legislators still couldn’t agree on a budget bill, but sometimes life surprises us. On Wednesday night, the Pennsylvania Senate passed HB 271, a bill which would legalize and regulate online gambling, including online poker, by a vote of 31-19. The bill is now in the House, which was unable to vote on it Wednesday night, but will continue debate on the bill Thursday morning.

We would direct you to the bill to give it a look (follow the link above if you would like), but is nearly 1,000 pages when viewed in Microsoft Word, so good luck and see you next week. As mentioned the bill would legalize online gambling. This includes casino table games like blackjack, internet slots, and online poker. It would also permit for daily fantasy sports and even sports betting, the latter if and only if sports betting is legalized nationally.

This is all well and good, but there is still a big problem: the tax rate on online slots is insane. At 52 percent plus another 2 percent local tax, it will keep most operators from even applying for a license. Supporters of the outrageous tax will say that brick-and-mortar casinos have their slots taxed at the same rate, so online operators should be able to handle it just fine. What they fail to mention or realize is that the land based casinos realize other revenue streams from their guests, like hotel stays, dining, and shopping. Online slots have none of that, only gaming revenue.

The tax rate set by the bill for online poker and table games is 14 percent plus the 2 percent local add-on, which is similar to what we have seen in other states that have legalized online gambling.

Casinos in the Commonwealth will have first dibs on applying for licenses. It won’t be cheap though: $ 10 million for the trio of slots, poker, and table games within the first 90 days of the bill becoming law and $ 4 million each after that period. After 120 days, operators from outside of Pennsylvania can apply for licenses at $ 4 million a pop.

The bill covers lots of other gambling. Online lottery sales would be authorized and special tablet gambling areas would be authorized at certain airports in the state. The bill also legalizes video gaming terminals (VGTs) – think things like video slots and video poker – at licensed truck stops. This has been the subject of heavy disagreement in the legislature, as many lawmakers don’t want gambling to spread too far outside of casinos for fear of abuse and increased competition with casinos.

The House did begin debating the bill Wednesday night, but as mentioned, no vote was taken and debate will continue Thursday morning. It is possible that a vote could happen before the lunch hour, so we’ll keep our fingers crossed that online gambling will finally be legalized in Pennsylvania this week.

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