Pennsylvania House Grants a Preliminary Go Ahead to Online Gaming

On Wednesday, the 22nd of June 2016, The Pennsylvania House announced a preliminary approval for a proposal to legalise online wagering and permit the placement of slot machines in airports, truck stops and off-track betting sites around the state. The supporters, of this plan to expand online wagering, have said that the measure could generate around USD 250 million each year in revenues for the state fund.

The online gambling bill, which also aims to regulate and tax fantasy sports contests within the state, is still far from becoming law. The bill still requires final approval from both the House and the Senate; it is uncertain whether the bill has enough support in the Senate or the House to be passed as of yet. With the passage of each day, however, the state officials get closer towards a new fiscal year but a budget deal has not been put in place as of yet; advocates of the gambling bill have called it a key step to secure taxes for the upcoming year.

House Majority Leader, Dave Reed (R., Indiana), said, “Gaming expansion money in one form or another is necessary for this budget process to be complete.”

Online wagers allowed

The gambling bill, among other things, would allow casinos, which are licensed in the state of Pennsylvania to also take online wagers from gamblers resident within the state; similar laws are already in place in other states such as New Jersey.

The vote taken on the bill, generated an outcome of 115-80, which cut across party lines; however, the members only decided to entertain this bill after they rejected a broader proposal that would have allowed video poker and other gaming machines to be legalised and placed in bars across the state.

Reed had said during his initial proposal that the gaming bill could generate about USD 400 million for the state but about half of that income would have come from the video gaming terminals.

Pros and Cons

The debate on the pros and cons of the measure lasted hours and State Representative Mark Mustio (R., Allegheny), mentioned during the discussions that their goal was create laws that allowed the government to extract tax funds from the citizens without having to force unpopular increase in income or goods taxes.

He said, “(The bill looks) to get revenues voluntarily from video game terminal players as opposed to going into their pockets for taxes.”

Opponents of the bill argued back by saying that such a step could eat into revenues for the Pennsylvania Lottery; which is also important for state funds, as proceeds from the lottery are used to fund senior programs in the state. They also mentioned that legalising gambling terminals at airports, truck stops and off-track betting sites will without a doubt affect business at the existing casinos in the state as well.

State Representative, Thaddeus Kirkland (D., Delaware), who is opposed to the bill, said, “Harrah's, once again, is an economic engine for our community,” when arguing against the placement of gaming terminals in bars.

Pennsylvania Governor, Tom Wolf, shared some concerns with the opposition, he too raised apprehensions about the economic ripple effect that this video gaming expansion venture will have, particularly on the state lottery.

The week before the House declared the tentative OK on the gambling bill, the Department of Revenue released a report, which projected that legalisation of video gaming terminals around the state could reduce lottery ticket sales by a sum as large as USD 2.3 billion over the next 10 years and also reduce their profits by USD 592 million.

Will there be support?

However, despite harbouring these worries, the Democratic governor has given the indication that he might be willing to support some form of an expanded gambling bill in the state, as part of a budget agreement for the year.

The next fiscal year for Pennsylvania starts on the 1st of July 2016; Governor Wolf and the Republican-led Pennsylvania Assembly have entered into the final stretch of their discussions regarding the next year; however, speaking to both sides, neither had indicated whether they were close to striking a deal.

The residents of the state would probably be happy to hear that Wolf backed away from past calls for an increase in the personal income or sales taxes in the state but his office, the Wolf Administration, has repeatedly emphasised during Wednesday’s meeting that a USD 1 billion gap in the budget still needs to be filled.

 

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