US Act 42 of 2017 authorises online gambling in Pennsylvania By enacting Act 42 of 2017 at the end of October this year, Pennsylvania joined the small group of US states to have authorised online gambling. As well as facilitating an expansion of the State’s land-based sector, Act 42 authorises, regulates and taxes online fantasy sports contests, internet gaming websites and sports wagering activities, with the latter only e fg ective in the event that US federal law changes to allow states to regulate sports wagering. Anthony R. Holtzman and Robert A. Lawton of K&L Gates examine in detail the provisions of Pennsylvania’s i-gaming statute, and comment on reactions to the Act so far. After entertaining the idea for more the relative knowledge and skill of Licensed operators must implement than five years, Pennsylvania, on 30 participants’ and ‘are determined by procedures and controls that meet October 2017, enacted legislation that accumulated statistical results of the a number of consumer protection authorises and taxes internet gaming performance of individuals, including and other criteria. They must, for activities. With the enactment of Act 42 athletes in the case of sports events.’ example, develop and o fg er certain of 2017 (‘Act 42’), Pennsylvania joined No winning outcome, moreover, may fantasy contests that are limited to New Jersey, Nevada, and Delaware as be based on the score, point spread, beginners and others ‘in which highly the only US states that have authorised or performance of ‘a single actual team experienced players cannot, either an online wagering program. As or combination of teams or solely on directly or through another person as a Pennsylvania strives to close its $2.2 a single performance of an individual proxy, participate.’ Certain people are billion budget deficit, it estimates athlete or player in a single actual event.’ restricted from participating in fantasy that Act 42 will generate more than contests, including corporations and $200 million in tax-and-fee revenue Under Act 42, the Pennsylvania Gaming other entities, people under the age of during the 2017-2018 fiscal year. Control Board (‘Board’) is charged 18, and a ‘licensed operator’s principals, with regulating fantasy contests in employees and relatives living in the Act 42 is a multifaceted gaming bill Pennsylvania. The Board is empowered same household of an employee or that not only facilitates an expansion to issue fantasy contest regulations principal[.]’ A licensed operator must of land-based gambling activities in and licences to operate fantasy contest also verify a person’s age, location, Pennsylvania, but also authorises, websites. It is also authorised to and identity before allowing him/her to regulates, and taxes the operation of enforce the fantasy contest provisions make a deposit into a fantasy contest online fantasy contests, internet gaming in Act 42 and the regulations and account. Fantasy contests, in addition, websites, and online lottery games. licences that it issues by, for example, cannot be based on collegiate or high imposing administrative sanctions school athletic events or players. Act 42, in addition, authorises, regulates, for violations of those authorities. and taxes the operation of land- Any licensed operator that holds based and internet sports wagering Under Act 42, an entity is eligible for a Pennsylvania casino licence is activities. This authorisation, however, a licence to o fg er fantasy contests in permitted to operate not only a is not e fg ective unless and until US Pennsylvania regardless of whether it fantasy contest website, but also federal law changes so as to permit holds any other gaming authorisation. ‘fantasy contest terminals’ within the states to regulate those activities. To acquire the licence, the entity casino facility. The terminals are land- must demonstrate that, among other based devices that allow individuals things, it possesses the ‘financial to participate in fantasy contests. Online fantasy contests Act 42 establishes a comprehensive stability, integrity and responsibility regulatory regime for online fantasy to comply with [the statute] and Under Act 42, each entity that receives a contests in Pennsylvania. regulations established by the Board.’ licence to o fg er fantasy contests must ‘pay The term of the licence is five years. to the Board a license fee of $50,000.’ The statute defines a ‘fantasy contest’ The fee for renewing the licence as an ‘online fantasy or simulated Act 42 establishes requirements for (after its five year term) is $10,000. game or contest’ that has an entry fee enabling fantasy contest participants and a prize and in which, among other to set up, fund, and make payments Each month, moreover, a licensed things, all winning outcomes ‘reflect from online ‘fantasy contest accounts.’ operator must pay ‘a tax of 15% of ONLINE GAMBLING LAWYER 4
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