Online Gambling Pa Law

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PA online gambling implications. Because of the way Pennsylvania’s online gambling law is structured, with one slot, table game and poker license available for each slot licensee in the state, as soon as Philly Live! Pays the fee for its slot license, the number of online gambling licenses in Pennsylvania will increase. Gambling is defined in numerous ways, but requires betting or wagering on an outcome that is at least partially based on chance, and done so in order to win something. Illegal gambling is any type of gambling that is specifically prohibited by state law. Gambling Involves a Bet. Gambling winnings are fully taxable by the Commonwealth of Pennsylvania. State residents must pay state income tax on all gambling and lottery winnings from any source, except for non-cash prizes from playing the Pennsylvania State Lottery. As a resident, you must include lottery winnings from other states and countries.

Pennsylvania has experienced a quick rise in the gambling world. After
legalizing casinos and racinos in 2004, they have now earned over $3 billion
from 13 casinos.

Thanks to high casino taxes, the state collects over $1.4 billion in annual
tax revenue – highest of any American casino market.

Gambling is big business in the Keystone State, and they’re looking for ways
to increase this business. The most discussed option right now is regulated
online gambling. The exciting thing is that Pennsylvania is close to legalizing
the activity at the time of this writing.

So, what are your Internet gambling options in the meantime?

This is one question that we’ll answer while covering Pennsylvania’s online
gambling laws.

Online Gambling and Pennsylvania Law

Pennsylvania’s criminal code doesn’t mention online gambling or any related
terms like “Internet” or “computer.”

This leaves their Internet gambling market in a grey area-one that’s served
by many offshore operators. Going further, you can access a number of online
casinos, poker rooms and sportsbooks from Pennsylvania.

Of course, just because offshore gambling is available doesn’t mean it’s
legal. This is why we’re going to take a deeper look at Pennsylvania’s gaming
laws below.

Is Online Gambling Legal in Pennsylvania?

No, but it’s not explicitly illegal either.

The Pennsylvania Constitution doesn’t offer a definition of illegal gambling.
Instead, their criminal code is mainly focused on illegal operators – especially
those offering lottery games.

Code 5513 is the closest thing that could be used to pursue offshore gambling
operators. Here are a few excerpts from this law, which lays out first-degree
misdemeanor penalties:

(2) “… allows persons to collect and assemble for the purpose of
unlawful gambling at any place under his control.”

(3) “… solicits or invites any person to visit any unlawful gambling
place for the purpose of gambling.”

These statutes are aimed at illegal land-based gambling businesses. They can
also be used against offshore gaming sites if Pennsylvania feels the need to do
so.

In summary, we don’t see anything too damning against Internet gambling. This
is why offshore operators continue to offer services to Quaker State residents.

How Close is Pennsylvania to Legalizing Internet Gambling?

At the time of this writing, Pennsylvania is very close to regulating
iGaming.

The Keystone State’s legislative efforts dates back to 2013, when House
Representative Tina Davis introduced a bill to legalize online poker. This
legislation didn’t go very far, but it did get the ball rolling.

2015 saw another advancement when the House Gaming Oversight Committee passed
HB 649 by an 18 to 8 vote. The State House, however, rejected the legislation by
an 81 to 107 vote.

In 2016, HB 649 passed the State House by a 114 to 85 vote, but the State
Senate elected not to vote on the bill before their session ended.

Currently, two bills are on the table in SB 900 and HB 271. Here’s a closer
look at both pieces of legislation:

SB 900 – Sponsored by State
Senators Kim Ward, Joseph Scarnati and Elder Vogel, this bill would legalize
online casino and poker games. The tax rate is 54% though, and the licensing fee
is $10 million for 5 years. The 54% tax rate will scare many potential operators
away.

HB 271 – Another bill that
would regulate online casino games and poker, this legislation has passed the
Senate Appropriations Committee (24 to 2 vote), Senate Community Economic &
Recreational Development Committee (11 to 3 vote), State Senate (38 to 12 vote)
and State House (102 to 89 vote). The House lowered the tax rate (also 54%), and
the Senate must now vote to see if they approve.

Considering that the State House and Senate have both passed iGaming
legislation, it’s obvious that the state is in favor of the activity.

This is the case especially when considering that they must be creative about
finding ways to fund their $32 billion budget plan. The biggest hang up, though,
is the enormous tax rate.

If they can get this aspect settled, then it won’t be long before
Pennsylvania has regulated iGaming.

Can I Get Arrested for Gambling Online in Pennsylvania?

It’s very unlikely that you will be – if not downright impossible.

Pennsylvania’s criminal code doesn’t include any language that would result
in prosecution solely for playing online casino or poker games.

The one way this will change, though, is if Pennsylvania legalizes online
gambling.

This would make it perfectly legal to play at licensed online casinos and
poker sites, but the state government would almost assuredly ban residents from
playing at offshore gaming sites.

We’ve yet to see any of the states with regulated iGaming markets (Delaware,
Nevada, New Jersey) arrest anybody for offshore gaming. Then again, all three
states have also banned offshore companies and made it clear that they won’t
tolerate these sites operating in their boundaries.

Are Offshore Gaming Sites Safe?

We see Pennsylvania legalizing online gambling in the near future. Until this
happens, your best option is offshore sites.

The key is making sure that you only choose reputable sites that offer good
customer service and longevity. The latter aspect is especially important so you
know that the company operates honestly enough to stay in business.

Here are a few other key factors you want to look for in an offshore gaming
site:

• Deposit options that you can use.
• 24/7 customer service with live chat.
• Good game variety.
• Limited customer complaints (google for complaints).
• Favorable bonus terms & conditions – the lower the bonus wagering
  requirements, the better.
• Fair gaming with no major scandals.

Remember that offshore gaming companies aren’t licensed in the U.S., so they
don’t adhere to laws in unregulated states.

This makes it important to read reviews and do your research to make sure
that you’re signing up with a quality operator. If it makes you feel better, the
majority of offshore sites are reputable and value repeat business.

Also On This Page

More Gambling Laws in Pennsylvania

• Casino Games: Legal
• Sports Betting:Illegal
• Poker: Legal
• Racing Betting:Legal
• Lottery: Legal
• Bingo: Legal
• Charitable Gambling: Legal
• Social Gambling: Not Specified

Casinos: Legal

The Racehorse Development and Gaming Act of 2004 allows for legal commercial
casinos, racinos and slots parlors in Pennsylvania.

The Keystone Stone has experienced major success with their casino market,
pulling in over $1.4 billion in tax revenue annually.

They’ve also managed to keep many of their residents from traveling to New
Jersey and other destinations for gambling. While this has been detrimental to
Atlantic City, it’s kept billions of tax dollars in state over the years.

Pennsylvania has video gaming in its bars, nightclubs and restaurants. These
are only Class II gaming machines, though, meaning they must determine results
through virtual bingo cards.

Aside from having a predetermined number of prizes, Class II gaming is
similar to slot machines in commercial casinos.

Charitable Gambling: Legal

The Small Games of Chance Act sets forth laws and regulations for charity
gambling.

This act allows approved groups to generate revenue through bingo, drawings,
pull tabs, punchboards, raffles and weekly drawings.

Eligible groups must advance one or more of the following causes:

• Combat juvenile delinquency.
• Helping the aged, distressed and/or poor.
• Improving mental, physical or spiritual aspects of young men and women,
  such as the YMCA and YWCA.
• Offering humane services.
• Volunteer ambulance, firefighter, rescue squad, senior and wildlife
  organizations.

Lottery: Legal

Approved in 1971, Pennsylvania has one of America’s biggest lotteries,
pulling in over $4 billion in annual revenue.

Available games include: Big 4, Cash 5, Daily Number, Mega Millions and
Powerball. They also feature scratch off/instant tickets, which are their
biggest sellers.

Poker: Legal

Pennsylvania has several poker rooms throughout the state, and they offer
over 260 tables combined.

Available poker games include: 7 card stud, 7 card stud Hi Lo, mixed games,
Omaha, Omaha Hi Lo and no limit Texas holdem.

Racing: Legal

The Coal State has six racetracks, including Harrah’s Philadelphia, Hollywood
Casino (off track), Meadows Racetrack, Mohegan Sun at Pocono Downs, Parx Casino
and Racing and Presque Isle Downs and Casino.

Thanks to the Race Horse Development and Gaming Act, all of these venues can
offer slot machines.

Social Gambling: Not Specified

Pennsylvania’s gambling laws don’t offer a definitive statement on social
gaming.

Code 5513 (2) does contain the following excerpt though:

“… allows persons to collect and assemble for the purpose of unlawful
gambling at any place under his control.”

This would technically make hosting a social gambling function illegal, but
without a concrete definition on illegal gambling, it’s hard to make this
determination.

The case
Commonwealth vs. Watkins makes it seem as if social gambling is legal in
Pennsylvania.

Pennsylvania charged Diane Dent and Walter Watkins with holding illegal poker
games in their garage. Dent received tips while working as the dealer, which was
one of the biggest issues.

Despite the voluntary dealer tips, Judge Thomas A. James Jr. acquitted Dent
and Watkins as he ruled that poker is skill based game.

Pennsylvania will bust an illegal gambling function where the host is
profiting through rake and/or by selling food and drinks. You’re most likely
safe to engage in social gambling here, provided everything is legal.

Gambling Venues in Pennsylvania

Pennsylvania has one of the largest casino gambling markets in the world with
over 29,000 gaming machines and 1,100 table games.

Their biggest gaming venue is Parx Casino and Racing, which has over 3,500
slot machines and 130 table games. The second largest is Sands Bethlehem with
more than 3,000 gaming machines and 180 table games.

Below, you can see details on these casinos and others in the Pennsylvania
gambling market:

1) Harrah’s Philadelphia Casino & Racetrack

777 Harrah’s Boulevard, Chester, Pennsylvania

2) Hollywood Casino & Off Track Betting

777 Hollywood Boulevard, Grantville, Pennsylvania

3) Lady Luck Casino Nemacolin

4067 National Pike, Nemacolin Woodlands Resort

4) Live! Hotel & Casino Philadelphia

900 Packer Avenue Philadelphia, Pennsylvania

5) Meadows Racetrack & Casino

210 Racetrack Road Washington, Pennsylvania

6) Mohegan Sun at Pocono Downs

1280 Highway 315, Wilkes-Barre, Pennsylvania

7) Mount Airy Casino Resort

312 Woodland Road, Mount Pocono, Pennsylvania

8) Parx Casino and Racing

2999 Street Road, Bensalem, Pennsylvania

9) Presque Isle Downs & Casino

8199 Perry Highway, Erie, Pennsylvania

10) Rivers Casino

777 Casino Drive, Pittsburgh, Pennsylvania

11) Sands Casino Resort Bethlehem

77 Sands Boulevard, Bethlehem, Pennsylvania

12) SugarHouse Casino

1001 North Delaware, Philadelphia, Pennsylvania

13) Valley Forge Casino Resort

1160 First Avenue King of Prussia, Pennsylvania

History of Gambling in Pennsylvania

Pennsylvania had a quiet gambling history until 2004, when the Racehorse
Development and Gaming Act approved casinos, racinos and slots parlors.

Since then, Pennsylvania has had 12 casinos spring up in their state.

Mohegan Sun at Pocono Downs became the first casino to launch in the Quaker
State. Nine more gambling venues would open over the next three years alone.

One thing that’s currently missing from Pennsylvania’s gambling history,
though, includes legalizing online gaming. With several legislative attempts in
recent years, this should come very soon.

Racehorse Development and Gaming Act passed, allowing commercial casino, racinos, and slots parlors.

Mohegan Sun at Pocono Downs opens in Novewmber, becoming Pennsylvania’s first casino; Philadelphia Park Casino and Racetrack opens the following month.

Harrah’s Chester Casino and Racetrack, Presque Isle Downs and Casino, Meadows Racetrack and Casino, and Mount Airy Casino open.

Hollywood Casino at Penn Nation becomes seventh casino to open.

Sands Bethlehem Casino and Rivers Casino both open.

Gov. Ed Rendall approves legislation to allow table games at casinos.

House Rep. Tina Davis introduces bill to legalize Internet gambling.

Parx Casino and GameAccount Network launch play money gaming site.

Four pieces of iGaming legislation are introduced, but none are approved.

HB 649, a bill to legalize Internet casino and poker games, passes Senate by a 114 to 85 vote, it fails to receive a vote during the House’s session.

HB 271 (legal online casino/poker games) passes State House and Sentate, the Senate must agree on the House’s amended tax rate.

Pennsylvania FAQs

The Keystone State doesn’t have any laws for or against online gaming. This
leaves a lot of questions to be answered regarding both daily fantasy sports
(DFS) and other forms of iGaming.

Let’s look at a few of the FAQs that we’ve received on Pennsylvania’s online
gaming market.

Are Daily Fantasy Sports Legal in Pennsylvania?

Pennsylvania follows a “predominance test” with regard to daily fantasy
sports. This means that levels of chance and skill are measured to determine if
DFS is a legal skill based activity.

As of now, DFS is in a grey area in Pennsylvania. There’s currently
legislation on the table that would legalize and regulate the activity.

State Senator, Gary Reschenthaler has introduced legislation that seeks to
legalize DFS. This bill is receiving some attention because it would help the
aforementioned state budget problem.

Even if Reschenthaler’s bill doesn’t pass, players can still enjoy DFS
through Pennsylvania’s unregulated market.

Why does Pennsylvania Allow Offshore Gaming Sites?

The Quaker State doesn’t have any legislation in place that allows offshore
operators. They don’t pay much attention to these sites though.

Like other states, Pennsylvania has more pressing matters to worry about
other than chasing offshore companies in the Caribbean or Central America. Plus,
it takes a lot of manpower and legal resources to pursue such a case.

The U.S. Department of Justice carried out a successful case against online
poker sites. Dubbed
Black Friday,
this operation busted the owners of Absolute Poker, Full Tilt Poker, PokerStars
and UltimateBet for money laundering and bank fraud.

Pennsylvania won’t carry out the same kind of largescale case against
offshore operators – especially when they already have budget difficulties.

Pennsylvania’s stance against offshore gaming companies will change when/if
they legalize iGambling. For now, they’re taking a laidback approach.

Why do I Keep Seeing Commercials Bashing Online Gambling?

For a while, the Coalition to Stop Internet Gambling (CSIG) ran numerous
advertisements railing against Pennsylvania’s online gambling efforts.

Their key points included biased studies that Internet gambling will lead to
widespread addiction and an increased number of underage players.

Online Gambling Pa Lawyers

Las Vegas Sands Chairman Sheldon Adelson, who owns the Sands Bethlehem
Casino, funds the CSIG. His main goal is to stop Internet gambling in
Pennsylvania as well as other states.

Adelson would also like to see iGaming banned on a federal level. He’s funded
several politicians who have in turn
introduced the Restoration of America’s Wire Act (RAWA) to U.S. Congress.

The good news, though, is that Adelson’s bill has
failed to gain any traction with conservatives, despite the fact that he’s
one of the top GOP donors.

Will Pennsylvania Legalize Online Sports Betting?

This seems unfathomable right now with the current federal ban in place. We
do see the Quaker State eventually being able to regulate Internet sports
betting though.

The Professional and Amateur Sports Protection Act (PASPA) of 1992 bans
sports wagering on a federal level. The only four exceptions include the
grandfathered states of Delaware, Montana, Nevada and Oregon.

New Jersey has been fighting PASPA in an attempt to have land-based
sportsbooks.

NBA Commissioner, Adam Silver – although not approving of sports gambling –
believes the
activity should be legalized to give consumers options besides offshore
sportsbooks.

The Pennsylvania House Gaming Oversight Committee preemptively passed a
sports betting law (23 to 1 vote) to legalize sports betting. This would take
effect if Congress ever repeals PASPA.

Is It Legal to Gamble on My Smartphone in Pennsylvania?

Keeping with the theme of Pennsylvania’s other gambling laws, we don’t see
anything that would deem smartphones gaming to be illegal.

Many states have broad laws that cover wireless capable devices like
computers, smartphones and tablets, but Pennsylvania’s criminal code doesn’t
discuss such devices in a manner that would make them illegal. Instead, all
language regarding illegal devices is aimed at operators – namely those with
slot machines.

Here’s an example from code 5513 (1):

“… intentionally or knowingly makes, assembles, sets up, maintains, sells,
lends, leases, gives away, or offers for sale, loan, lease or gift, any punch
board, drawing card, slot machine or any device to be used for gambling
purposes, except playing cards.”

As you can see, this discusses physical gambling devices that illegal gambler
operators would offer. It doesn’t, however, come remotely close to deeming smart
phones/tablets as gaming devices.

Long story short, you’ll likely never be arrested for playing online casino
and poker games on your phone.

Additional Resources

The Pennsylvania Gaming Control Board oversees the state’s 13 licensed
casinos and slots parlors. They also work with the State Horse Racing Commission
to oversee racinos.

Here’s a closer look at both of these agencies along with more resources on
Pennsylvania gambling laws.

The Gaming Control Board’s website offers revenue reports, regulations, info
on hearings and licensing information.

Pennsylvania’s gaming laws are constantly influx, but this page will help you
keep up with some of the updates they make.

The Future & Your Views

Pennsylvania is the next closest candidate to legalize online gambling.

They’ve introduced several pieces of iGaming legislation over the past few
years. HB 271 has passed both the State Senate and House, even though the latter
takes issue with the taxes.

The main sticking point is the 54% tax-rate that’s featured in HB 271 as well
as several other legislative attempts.

Pennsylvania taxes land-based slot machine revenue at 55%. Politicians would
like to see the online gambling rate approach this amount.

We don’t see this being viable, though, because nobody in the world taxes
Internet gambling at 54%.

Many consider Spain to have a high iGaming tax rate at 25%, not even charging
half of what Pennsylvania bills have proposed.

By comparison, neighboring New Jersey only taxes online gambling revenue at
15%.

The good news is that Pennsylvania needs as much revenue as possible to meet
their current $32 billion budget. This makes it likely that they’ll work out the
tax-rate problem and pass something soon.

In the meantime, Quicker State gamblers still have access to a wide variety
of offshore gaming sites.

Duane Morris gaming lawyers carefully consider and evaluate the impact of any advice – regardless of the task at hand – on our clients’ continued compliance with gaming laws and their reputation among gaming regulators for honesty, integrity and business acumen. That is our value add.

Duane Morris gaming attorneys have decades of experience representing the diverse and growing range of participants in the gaming industry. We have significant experience advising clients including owners and operators of casinos and pari-mutuel wagering facilities, online/mobile operators, manufacturers of gaming equipment and software, eSports entities, key employees, banks and non-traditional lenders, as well as vendors that provide goods and services to casinos. With the advent of internet and mobile gaming and the proliferation of sports wagering after the U.S. Supreme Court’s decision overturning the Professional and Amateur Sports Protection Act in May of 2018, we also represent technology providers for internet and mobile gaming, sports wagering operators and multimedia companies seeking to coordinate, work with and form partnerships with these new industry participants.

Licensing, Findings of Suitability and Approvals

All gaming industry participants, from the largest operators and national banks to the vendors in the food court, share a common element: participation in the gaming industry requires a license or approval from a state or tribal gaming regulatory authority and/or an approval by a corporate compliance committee, who issue findings of suitability after conducting rigorous background investigations.

As a core area of our practice, Duane Morris helps clients obtain and maintain these valuable licenses and approvals, guiding them from the initial application, to the investigation and interview process, to the public hearing on the finding of suitability and issuance of a license or approval, through the ongoing obligation to update regulators. Where permitted by applicable regulations or policies, we deftly pursue waivers or exemptions from licensing requirements on behalf of investors, banks and others who do not exert the requisite control over the gaming enterprise.

Maintaining Compliance with Regulations

Clients frequently seek our advice on such matters as whether a gaming employee’s conduct justifies or requires discipline, whether a patron’s behavior requires exclusion from the casino, or whether an affiliate’s activity in another jurisdiction requires regulatory approval. With our extensive work in the industry, we interpret gaming regulations and work with regulators to address these issues promptly and clearly. Our lawyers regularly attend the monthly meetings of the gaming regulators in the jurisdictions in which we practice to follow closely any trends or changes in regulatory policy that may be under consideration.

Duane Morris gaming lawyers advise compliance committees of casinos and equipment manufacturers on regulatory compliance and reporting requirements, compliance audits and internal investigations. Our goal is not only to help clients conduct the required investigations of those with whom they do business and document those efforts for regulators, but also to identify and address potential issues before they become areas of concern to regulators. We then develop practical solutions to address the issues and fashion disclosures that satisfy legal requirements, while remaining sensitive to our clients’ needs and reputations.

Focusing on the Long Game

With the complex regulatory requirements surrounding gaming, companies can unknowingly commit violations and risk fines or other sanctions through normal business dealings. Negotiating and documenting material agreements, loans and M&A transactions, preparing offering documents, or handling disputes in the gaming industry can present unexpected challenges and consequences. For example, gaming regulators might disapprove if a large industry participant were to seek unreasonable concessions from a small vendor. Duane Morris gaming lawyers carefully consider and evaluate the impact of any advice – regardless of the task at hand – on our clients’ continued compliance with gaming laws and their reputation among gaming regulators for honesty, integrity and business acumen. That is our value add.

Boutique Firm Focus, Full-Service Capabilities

Duane Morris’ gaming lawyers have the seamless support and resources of our full-service international law firm to assist clients in all facets of their gaming or gaming-related businesses. Our core gaming lawyers focus on regulatory and licensing issues and work closely with other Duane Morris lawyers when clients seek to establish new ventures, expand organically or by acquisition, raise debt or equity capital, or face other issues that arise in the course of business. At our core is a team with extensive experience in corporate transactions and commercial arrangements known for successfully navigating the most complex of matters. The intricate levels of regulatory compliance have made consolidation within the industry an increasingly attractive option. Our years of experience providing complex M&A, structuring and regulatory advice allow us to guide clients through all phases of their growth cycle. For example, in a typical bricks-and-mortar casino acquisition, our gaming lawyers will call upon lawyers from our corporate, real estate, environmental, labor and employment, intellectual property and finance groups as needed for due diligence and to review the provisions of transaction documents from different legal perspectives. Lawyers from our Trial Practice Group can assess any pending or threatened litigation against the target company. If the transaction involves raising capital, Duane Morris lawyers have extensive experience in syndicated loan or capital markets transactions. Our gaming lawyers manage the entire process to drive efficiencies and help ensure that every aspect of the transaction satisfies regulatory requirements.

Recognized in the Gaming Industry

Online Gambling Pa Laws

Duane Morris gaming attorneys are frequently called upon by other firms to serve as special gaming counsel in connection with their clients’ transactions. Our attorneys are prolific authors and speakers on gaming issues and share insights and strategies on the latest developments in gaming law through industry publications, Duane Morris Alerts, the Duane Morris Gaming Law blog, CLE events and industry conferences.

Pa Online Gambling Laws

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Online Gambling Pa Lawyer

For additional information, please contact Frank A. DiGiacomo, Robert L. Ruben or any of the lawyers referenced on the Attorney Listing.

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