Taxes Threaten Pennsylvania Online Gaming

pennsylvania button PNGPennsylvania could become a leader in online gambling, but a high tax rate could kill the idea before players can place a bet, say two advocates of Internet gambling.

“People won’t invest proper marketing dollars to drive revenue if the tax rate’s too high,” says David Licht, executive chairman and CEO of All American Poker Network, which operates an online network in New Jersey and has an agreement with Mt. Airy Casino, Monroe County, to set up online gaming if Pennsylvania legalizes it.

“If the tax rate is exceedingly high, the operator is going to take that out on the consumer,” says John Pappas, executive director of the Poker Players Alliance, which bills itself as a voice for gamblers.

At least four proposals to legalize online poker or all forms of casino gambling are before the Legislature as lawmakers and the governor struggle with the state budget. Proposed online tax rates are 14 percent, 28 percent and 54 percent.

Licht and Pappas tell Player’s Advantage that Pennsylvania’s population of about 12.8 million and residents’ fondness for betting — only Nevada generates more gambling revenue — make it important to supporters of online gaming.

“That sets up Pennsylvania to be the (online) leader in all the states,” Licht says. “I think it’s an enormous opportunity both for the government to raise money and the operators to operate in a profitable fashion.”

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