PA High Tax Rate on Online Casino Games Like Secrets of the Phoenix Slot Stifle the Gambling Industry

Pennsylvania representatives persist to unnecessarily intricate the affair against authorising online gambling. It appears almost certain that the subsequent part of the legislation will receive a repressive 54% tax rate on online slots such as Secrets of the Phoenix slot, merged with a 16% rate on table games as well as poker. These rates would align those of the state’s 12 physical casinos, with the erroneous justification being that the lower tax rates on web gambling will push the casinos to resort to the Internet.

There have been few distressing clangers, first that advises all online casino games like Secrets of the Phoenix slot be levied at 54%, and second, that would provide PA casinos with a restricted exclusivity window to obtain one of the 12 licenses. The jurisdictions also revolved around the concept of distinct $5 million licenses for the online casino as well as online poker.

Although these propositions are mostly irrational, there are also a few prospective for PA online gambling if tax rate of 54% on online slots is imposed.

Casinos Obtain Invite, No One Shows Up Following the PA High Tax Rate

If the legislators enforce a $10 million licensing fee on online gambling and combine that with a 54% rate on the online slots like Secrets of the Phoenix slot, the probable result will be that not even a sole PA casino operator will register. The casino operators could not fairly build a path to expediency if the slot tax rate was very high. There is a risk to take a $10 million chance because the odds of gaining profit are almost zero.

Even the state’s largest land-based operator, Parx Casino, who can bear to take a chance, would likely refrain as it seems content with the status quo and would likely switch to online gambling if other land-based operators decide so. At 54 percent, the other operators will apparently not resort to online gambling. It will appear as if online gambling was never authorized and as a result, black market websites will resume possessing power.

No One Shows Up Due to the Imposition of PA High Tax Rate, PA Lottery is in Command

If not sole casino applies for an authority, then PA can find a prepared player in the lottery. According to a recent account presented by Gambling Compliance, the Pennsylvania Lottery would be willing to run the state’s online gambling market, if allowed. Although, there are also contradicting reports suggesting not to give the command to the PA lottery.

The PA online gambling is likely to produce $126 million in direct licensing fees only if the casinos are buying those licenses. The PA lottery has no practice in operating online gambling. If the casinos suffer a loss while functioning online gambling, it is totally on them. On the other hand, if the lottery operates at a loss, it is on the state. There is cooperation among physical as well as online casinos, but if the lottery is in power, the synergy would not be present.

A Few Casinos Sign Up Due to the PA High Tax Rate, But Players Suffer

If a few casinos register for online gambling, then they must take a couple of measures as below. Although they will not be profitable for players:

  • Less payback on games
  • Lesser or no promotions
  • Flat VIP programs
  • Smaller game libraries
  • Focus on table games

One tactic applied by operators can be to turn focus to table games as they charge tax rate of 16 percent. But in Pennsylvania, table games profit is roughly 27.5% of total land-based profit and Blackjack, Roulette, Baccarat and Three Card Poker would not alone make it. A rational tax rate on online slots like Secrets of the Phoenix slot is required.

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