Posts Tagged ‘Bill’

New Pennsylvania Online Gambling Bill Presents Major Tax Question

 New Pennsylvania Online Gambling Bill Presents Major Tax Question

Pennsylvania State Senator Jay Costa, along with co-sponsors Senators Wayne Fontana, Vincent Hughes, and Judith Schwank, introduced Senate Bill 524 on Monday, an overarching gambling bill which includes the legalization and regulation of online poker in the state.

Costa previewed the bill in January when he filed a Senate Co-Sponsorship Memorandum, but this is the first time we have seen the initiatives laid out in full. Much of it we already knew was coming. In addition to legalizing and regulating online gambling (not just poker), it also does the same for daily fantasy sports. It expands land-based gambling, as well, allowing for multi-state progressive slot machine jackpots as well as “skill-based” slot machines.

Airports would also be allowed to have “multi-use computing devices” (read: tablets) in designated areas for online gambling. Legislators were split on this issue last year, as many didn’t like the idea of expanding gambling out of casinos.

The part of SB 524 that will likely be the most controversial is the costs it sets for online operators. Compared to other bills that have already been introduced in Pennsylvania, Costa’s bill just pummeled licensed operators with taxes and fees to the point where it wouldn’t make sense for any but the richest operators to jump into the market.

SB 524 would impose a license fee of $ 10 million, compared to $ 8 million for the other bills. For vendors, those companies that would not operate online gambling sites, but rather provide them with things like software or servers to support their operations, the licensing fees would also be much higher: $ 5 million compared to $ 2 million.

The nuttiest one, though, is that Costa’s bill sets the tax rate for online gambling and daily fantasy sports at a whopping 25 percent, versus 14 percent in the other bills. 14 percent is reasonable; it is in line with the tax rates of other states and still gives the government a chance to pull in solid amount of gambling income. 25 percent, though, is just punishing.

Online gambling operators have to be able to actually make a profit in order to stay in business. They can’t do that if the government goes ballistic with taxes. That’s not to say there should be no taxes – we all know everyone needs to pay their fair share to help our societies function (well, except Donald Trump) – but making the added gaming tax so high is just unnecessarily punitive.

And if it doesn’t hurt the online gambling operators, it will surely hurt the consumers. Does anyone think the online poker sites wouldn’t just pass the tax expenses on to the players in the form of rake. Or do we not think the casino operators would just dial back the payout rates slightly to make up for their added tax burden?

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Michigan State Senator Introduces Online Poker Bill

 Michigan State Senator Introduces Online Poker Bill

As my colleague Earl Burton wrote a couple days ago, there has been an uptick in online poker regulation activity in a number of states in the last few months. One state mentioned in his piece was Michigan, whose online gaming effort he said “hasn’t moved beyond talking.” But last week, a Michigan legislator did finally take the formal step and introduced a bill that would legalize and regulate online poker.

It was State Senator Michael Kowall, a Republican representing District 15, who introduced Senate Bill 0203 on March 1st, a bill which would create the “Lawful Internet Gaming Act.” The bill would authorize the new division of internet gaming to grant licenses to the state’s casinos. Of course, the casinos would have to apply for said licenses and would have to pay $ 100,000 to do so. The licenses would have a duration of five years and would come with a fee of $ 200,000 for the first year and $ 100,000 per year after that.

Online gaming vendors – for instance, companies that might provide poker software or computer equipment for the poker operators – can also apply for separate licenses. The price tags on those licenses would be significantly less than for the operators themselves: $ 5,000 for the application fee, $ 2,500 per year, and $ 5,000 for the first year.

The state would tax gross gaming revenue at 10 percent.

The beginning of bill explains that legalizing and regulating online poker makes sense for Michigan for reasons most of us have been preaching all along. The internet is woven into our lives just like telephones and televisions and people like to play poker online. These people should have the chance to play behind the consumer protections of regulations:

The legislature finds that the internet has become an integral part of everyday life for a significant number of residents of this state, not only in regard to their professional lives, but also in regard to personal business and communication. Internet wagering on games of chance and games of skill is a core form of entertainment for millions of individuals worldwide. In multiple jurisdictions across the world, internet gaming is legal, regulated, and taxed, generating billions of dollars in revenue for governments.

In order to protect residents of this state who wager on games of chance or skill through the internet and to capture revenues and create jobs generated from internet gaming, it is in the best interest of this state and its citizens to regulate this activity by authorizing and establishing a secure, responsible, fair, and legal system of internet gaming that complies with the United States Department of Justice’s September 2011 opinion concerning 18 USC 1084.

The regulations actually set out in the bill are fairly run-of-the-mill. Players must be 21-years old and located in the state of Michigan, players must be permitted to self-exclude, and online gaming operators must have procedures and technologies in place to be sure that only people permitted to play can actually logon and play, as well as being able to detect and prevent cheating.

While the bill does specifically mention online poker, it also says that it is not strictly limited to online poker and that other games can be offered.

Interstate compacts in which multiple states’ player pools are combined are also permitted.

Even if the bill somehow charges through the Michigan state legislature and becomes law quickly, it still could be a long time before any online poker rooms launch in the state. The division of internet gaming would be given a year to get all the rules set (could be less time, of course) and then nobody would be allowed to offer games for 150 days after the rules are formally laid out.

Poker News Daily

New York Assemblyman Confident Online Poker Bill Will Move Forward

 New York Assemblyman Confident Online Poker Bill Will Move Forward

Last year, arguably online poker’s biggest supporter in the New York legislature was the one who put the kibosh on the possibility of the game becoming legal in the state. Now, Assemblyman J. Gary Pretlow has expressed confidence that something will get done on the matter this year.

In 2016, a bill which would legalize and regulate online poker passed the New York Senate easily by a vote of 53-5. Pretlow had a similar bill in the Assembly and had been championing poker for a number of years, so one would have thought that the bill would at least have a fighting chance after it moved on from the Senate. Not so. Pretlow had concerns about the ability of online poker operators to prevent cheating and to ensure that only players from within state borders could access the sites, so the bill was never even voted upon.

Speaking with Andrew Whitman of New York’s FIOS1 News last week, Pretlow said his concerns have been alleviated. He made a “field trip” to New Jersey, where online gambling is legal, to speak with the Attorney General to learn more and to view gaming technologies in action. He came away “satisfied” that geolocation technologies works and that there are sufficient barriers to cheating in place. Thus, he feels comfortable moving forward in New York to try to get online poker legalized.

Whitman asked him about the reclassification of poker from a game of chance to a game of a skill. Though Pretlow did not straight-out say that poker is definitely a game of skill, he made his case in a round-about way, saying that it just depends on the player. For some, chance plays a greater role and for others, skill plays a greater role.

While Pretlow does not know if the Governor would eventually sign an online poker bill into law, he feels confident that he will have enough support in the Assembly to get it through.

“When I do sign off on something,” he told Whitman, “my colleagues feel that it is a good deal and they don’t question why I made a certain decision. They know that if that decision was made, it’s for good reason. So I don’t really see there’s going to be much opposition to moving this along.”

The process of legalizing and regulating online poker in New York has already gotten underway this year. A couple weeks ago, Senator John Bonacic’s bill, S 3898 easily made it through the Senate’s Committee on Racing, Gaming and Wagering by a unanimous vote. It will now be looked at by the Senate Finance Committee.

It is a fairly straightforward bill, allowing a maximum of ten online operating licenses with a fee of $ 10 million each. Though the bill only specifically mentions hold’em and Omaha, it is assumed that most forms of poker would be permitted. Players must be at least 21-years old and be within state borders, though the bill opens up the opportunity to form interstate compacts so that New York could pool its players with other states.

Poker News Daily

California Online Poker Bill Back for Another Go

 California Online Poker Bill Back for Another Go

They are back at it again in California. For about the billionth time this century, an online poker bill has been introduced into the state legislature and if we have learned anything, there will be a lot of pouting on both sides leading ultimately to nothing. The bill, Assembly Bill 1677 (AB 1677), also called the Internet Consumer Protection Act, was introduced by Assemblyman Reginald Jones-Sawyer late last week and will now begin all sorts of stupidity ending with us all saying, “Why can’t they just get it done already?

The bill would set the licensing fee for a cardroom or tribe to operate an online poker room at $ 12.5 million. The license would be good for seven years. The tax rate on gross gaming revenue is progressive; that is, the rate increases the more an operator makes. If an operators gross gaming revenue is less than or equal to $ 150 million, it will be taxed at 8.847 percent. From there up to $ 250 million, the rate is 10 percent. Below $ 350 million, the tax rate is 12.5 percent, and above $ 350 million, the rate is 15 percent.

Arguably the main reason nothing has ever gotten done in regards to online poker in California is because a hardline group of Native American tribes have essentially been adamant that they get everything they want, unwilling to compromise on most points. The composition of this group has varied, but the core members have been the Agua Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Lytton Rancheria Band of Pomo Indians, the Pechanga Band of Luiseno Mission Indians, the Table Mountain Rancheria of California, the Viejas Band of Kumeyaay Indians, and the Yoche Dehe Wintun Nation.

These groups want as few entities as possible to be able to operator an online poker room. Thus, AB 1677 presents a compromise, not allowing California racetracks to obtain licenses. In exchange for being excluded, the racetracks would share in 95 percent of the first $ 60 million collected by the state (so $ 57 million). Additionally, racetracks could serve as service providers (for instance, the provider of the poker software) and partner with an operator, but at least half of the partnership’s revenue would have to go to the racetrack.

The hardline tribes have long fought against allowing PokerStars to have any chance to be included in the California online poker industry. As such, they have always wanted a “bad actor” clause in any legislation, barring operators who offered games to Americans after the passage of the UIGEA in late 2006. This bill does not have a bad actor clause, rather leaving it up to state regulators to determine whether or not a license applicant it qualified for a license.

Because of its position as the most populous state in the country – by far – California is the white whale of the online poker industry. If the game were legalized and regulated in the state, any operator who gained a license could make a pretty penny. On top of that, the other states that have legalized online poker – currently Nevada, New Jersey, and Delaware – would line up to for interstate compacts with California to boost their player pools.

Good luck at anything ever happening, though.

Poker News Daily

New York Online Poker Bill Passes First Senate Committee by Unanimous Vote

 New York Online Poker Bill Passes First Senate Committee by Unanimous Vote

When New York State Senator John Bonacic once again introduced a bill to legalize and regulate online poker in the state in late January, it was expected that it would get through the Senate’s Committee on Racing, Gaming and Wagering fairly quickly. That expectation was correct. On Tuesday, Bonacic’s bill, S 3898, passed by a unanimous 11-0 vote and has now been advanced to the Senate Finance Committee.

The purpose of the bill, as stated on the bill’s webpage on the New York State Senate website, is quite simple:

To authorize the New York State Gaming Commission to license certain entities to offer for play to the public certain variants of internet poker which require a significant degree of skill, specifically “Omaha
Hold’em” and “Texas Hold’em.”

It also “….includes definitions, authorization, required safeguards and minimum standards, the scope of licensing review and state tax implications; makes corresponding penal law amendments.”

Some of the bill’s key points:

•    Permits the state to enter into interstate gaming compacts so that player pools can be combined.
•    15 percent tax on gross gaming revenue
•    A maximum of ten licensed operators who must pay a licensing fee of $ 10 million each. Licenses would be good for ten years.
•    Most forms of poker would be authorized, even though the above “purpose” statement only mentions hold’em and Omaha.
•    When and if the bill is signed into law, there will be a 180-day grace period before licenses can be issued and games can start, likely to make sure the state is properly prepared.
•    Operating an online poker site without a license is a crime. Unlicensed operators will be both fined and taxed.

Needless to say, if New York got an online poker industry up and running, that bit about interstate compacts being allowed is enormous. One would think that Nevada and Delaware, who have an agreement to share player pools, would be on the phone with New York immediately to try to get the Empire State on board. As readers of this site likely understand, online poker is all about player liquidity. Lots of players means active tables means more revenue. And the more activity the tables have, the more attractive the sites look to prospective players, resulting in more people signing up and the activity becoming even greater.

The reverse is also true: low activity leads to less attractive poker rooms leads to fewer signups and ultimately exiting players. Nevada and Delaware have fewer than 3 million residents between them (estimated) and can barely keep poker rooms going. New York, on the other hand, has nearly 20 million residents plus tons of visitors for both work and tourism every day. A combination with New York would do wonders for Nevada’s and Delaware’s online poker business.

Bonacic has made the regulation of online poker one of his primary focuses in the last several years, but obviously has never been able to get it done. His bill conquered the Senate easily last year, passing by a 53-5 vote, but was never voted upon in the Assembly.

Bonacic feels more confident this year, telling GamblingCompliance (premium content ahead), “Last year, there was too much gaming for the Assembly to consider with fantasy sports and the efforts in New Jersey for a referendum to put a casino in the Meadowlands, and I really think that it got put on the back burner. So now we are putting it in the front burner.”

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