Pennsylvania State Senator Sean Wiley is seeking cosponsors for a proposed bill that would reform a number of gaming laws in the state, as well as legalize online poker. Wileys proposal is all encompassing, and contains several controversial policy points that are currently being debated in the state. However, online expansion seems to be the central component of his plan, and his online gaming ideas are quite problematic. If it gains any traction, the bill will likely be discussed at a tentatively scheduled gaming hearing in the state senate CERD Committee on June 10. Bill would legalize online poker but not casino games Wileys legislation would only legalize online poker in Pennsylvania. This will put his proposal behind the eight ball from the outset, as the states primary reason for online expansion is revenue, which is mainly generated through casino games, not poker. For instance, in New Jersey online casino revenue was triple the amount of online poker in 2014, a split that has grown to 80/20 in recent months. Poker-only legislation would be a hard sell to a state legislature looking to find revenue in order to keep Governor Tom Wolfs plans to raise taxes at bay. Archaic tax rate and licensing fee More concerning are the numbers Wiley uses. I am proposing a $500,000 online gaming license fee and a tax rate of 36% on online poker revenues, Wileys proposal states. Both of these numbers are way off, as the lack of upfront licensing fees diminishes the skin operators have in the game. It would also fail to give the state enough capital to do the regulatory grunt work. The tax rate alone would make it extremely difficult for operators to compete against unlicensed sites and turn a profit. The current proposal supported by analysis from the iGaming industry (and the numbers present in Representative John Paynes HB 649 online gaming bill) calls for comprehensive online gaming expansion, a $5 million upfront licensing fee, and a tax rate of 14%. Wileys numbers look more like proposals from several years ago, prior to Nevada, Delaware, and New Jersey legalizing online gambling. Fear of RAWA Generating revenue doesnt even appear to be the impetus for Wileys call for online poker legalization. Wileys online poker proposal appears to be more of preemptive strike against potential federal legislation. This would effectively grandfather Pennsylvania in should there be changes to federal law re: online gaming, Wiley states. Effectively, online pokers rollout would be in a holding pattern under Wileys plan. My proposal would allow the PGCB to authorize online poker only after conducting a study to determine the impact online gaming would have on existing brick and mortar casinos, Wiley writes. Not a serious effort on the iGaming front The decision to go poker-only, the exorbitant tax rate and piddling licensing fee, the fear of RAWA passing, and the call for a study of online gamings impact on brick and mortar casinos are clear indications that Senator Wiley has not put a lot of time or energy into studying this issue. Anyone who has examined regulated online gaming will dismiss his proposal as an amateur attempt. The one saving grace The one aspect of Wileys plan that could be used in a more serious online gambling bill is the creation of a casino reinvestment fund. The first $10 million of online gaming tax revenues would be used to fund a casino investment grant program for a five-year period, Wileys proposal reads. Other toxic issues As noted above, the bill is far-reaching and attempts to reform several areas of gaming all at once. Some are popular ideas, but some are hot button issues likely to derail Wileys bill even if his online gaming proposal was overhauled. 7 year moratorium on remaining licenses With the state still sitting on a fourth casino license (and another Category 3 license available in 2017), Wiley would like to put a seven year freeze on further development. Regardless of where you stand on further land-based casino expansion in Pennsylvania, calling for a seven year moratorium seems like a hyper-reactive stance. Wiley also wants to make the remaining Category 1 casino license, which would be awarded no sooner than 2022 under his plan, made available to racetracks. Tracks would also be given priority over a non-racing applicant. Remove prohibition on owning more than 1/3 of a second casino Even though he notes this anti-monopoly has been effective, Wiley wants to change the existing law on ownership restrictions, to account for, the changing nature of the gaming industry, which he claims could make this provision problematic in the future in the event the number of viable operators decreases. Legalize fantasy sports competitions at brick and mortar casinos Wileys proposal would legalize brick and mortar fantasy sports contests at Pennsylvanias casinos. Changes to liquor laws Wileys legislation would allow casinos to purchase for a fee of $250,000 with an annual renewal fee of $50,000 a special permit that would allow them to adjust the hours they sell and serve alcohol, currently 7 AM to 2 AM. The permit doesnt extend the total number of hours liquor is available, just which hours its available. Casinos would also be able to offer free drinks to any patron, not just those playing slots or table games. Changes to the hours of liquor availability in casinos is a major point of contention in Pennsylvania.
Proponents of internet gambling regulation in Pennsylvania were treated to some hope that an iGaming bill could still pass the legislature this year. Report: iGaming-only bill possible A story at EGR North America (paywall) revealed the first concrete indication that an internet gambling measure could be a part of budget talks in Pennsylvania. Democratic governor Tom Wolf and the Republican legislature have been at an impasse in negotiations for more than five weeks now. There has been little common ground between the two sides, as they have disagreed on just about everything. That includes how much to spend in the budget, to what to spend it on, how to pay for the budget and how to trim a deficit in excess of a billion dollars. But the EGR report provided a glimmer of hope, saying as the budget talks have progressed, the bulk of the proposed gaming reforms have reportedly been scrapped, apart from egaming. The story was otherwise bearish on the prospects of a regulatory bill passing, but it is positive in that an iGaming measure isnt off the table. As politicians struggle to find revenue streams that they agree on, allowing iGaming and taxing it seems to be a point that the two sides could advocate to generate revenue. Stripping it down to just internet gambling There had been five pieces of iGaming legislation introduced and considered in the state legislature, but all of those have had gaming elements that affected brick and mortar casinos, as well. Those measures were largely more contentious than iGaming, although there are questions about implementation and the tax rate. The topic of internet gambling has stayed out of the political theater surrounding the budget impasse. The fact that iGaming is now a possible standalone concept increases its chances of passage. However, several casinos in the state had earlier opposed legislation that only dealt with internet gambling and removed other issues from the table. Representative agrees that online gambling is alive Rep. John Payne the chair of the Gaming Oversight Committee in the state house and one of the authors of the aforementioned bill backed up the assessment that online gaming is still in play in Pennsylvania. More from Card Player: Penn National Gaming, in its earnings call last month, seemed bearish on the prospect for iGaming in 2015, but even their executives didnt shut the door entirely. While Pennsylvanias budget remains up in the air, it appears that pretty much everything that could be a point of compromise between Democrats and Republicans likely remains in play. What remains to be seen is whether online gambling can be one of those things that the two sides agree should be a part of a revenue package moving forward.
Online gambling looked like it would have a real chance to pass in Pennsylvania in 2015 at least for a short period of time. That enthusiasm died down quickly, as Republican leadership in the state legislature indicated it did not want a gambling expansion package to be earmarked as a part of the state budget. However, the sentiment about keeping iGaming and the budget separate came at a time when it appeared like the governor and lawmakers had gotten on the same page in ending a six-month budget standoff. After approving a partial budget via a line-item veto, Gov. Tom Wolf showed he and House Republicans are still far apart on a number of important expenditure issues, and how much to spend on the budget. Where are we now? Online gambling likely remains on the sidelines during the budget impasse, for now, but its still very much in play for 2016. Online gambling, not a part of the budget? A gambling expansion package was at least a possible part of a budget revenue plan for a short time, in the eyes of some Republicans in the House. Thats according to the sponsor of online gaming and expansion bill, HB 649, Rep. John Payne. He told Online Poker Report that revenue from gaming is currently earmarked for dealing with a deficit in pension spending; putting gambling revenue into the budget would just create problems down the road, Payne indicated. More from OPR: Does that mean theres no chance online gambling and the larger gambling expansion package makes into the budget framework? Not at all. Given the fluid situation surrounding the budget the status of which changes almost daily it would probably surprise no one to see gaming expansion make it back into the conversation. The odds of that happening are perhaps not great, but they are at least greater than zero. Gambling expansion bill: Coming this spring? Even if online gambling, as part of a gambling expansion package, doesnt come this winter, Payne believes it will be something the legislature considers this spring. Still, online gambling has now become a part of a larger overall gaming expansion effort in the state, and that brings with it potential pitfalls. When online gambling has been considered on its own merits earlier in 2015, it was largely noncontroversial. The questions about iGaming were in many ways logistical and practical, not whether the state should or shouldnt have it. Now, however, every potential gaming expansion in the state has been lumped into HB 649, which started as an online-only bill. Now it contains far more controversial elements, such as the ability of private establishments to offer video gaming terminals. (The House amended HB 649 to include VGTs, and Senate Republicans indicated at one point that they didnt have the votes to pass the gaming bill as-is, with VGTs included.) The final form of HB 649 may well be key to whether we see online gambling in PA in 2016. If unpopular measures remain a part of the plan, then the bill could die in the legislative process. If its trimmed down to include measures that lawmakers and gaming interests can agree on, then Pennsylvanians might be playing online poker by this time next year.
Pennsylvania is considered the quintessential battleground state when it comes to presidential elections, but the Keystone State is fast becoming the battleground on another front as well, online gambling expansion in the United States. While the anti-online gaming crowd can wage its war each and every time a new state explores iGaming expansion, Pennsylvania is starting to look like a must-win for the pro-legalization side, at least in the near term. Why 2015 and Pennsylvania matter If Pennsylvania passes an online gambling bill in 2015, it has the real potential to relight the fuse in other locales that were once strong contenders but more recently have shied away from iGaming. It could also cause New Jersey to reexamine entering into an interstate agreement with Nevada and Delaware. If Pennsylvania cant get a bill passed this year, it pushes not only itself, but likely every state back a year. In that event, other states will almost certainly continue to take the wait and see approach, particularly if New Jersey continues to remain independent and the markets in the U.S. remain small and balkanized. With so much on the line it should come as no surprise that Pennsylvania newspapers have been alight with online gaming op-eds and polling data extolling the virtues of and condemning the ills of online gaming. CSIG chimes in The first op-ed salvo in Pennsylvania came from a familiar voice in the anti-online gambling movement, former Arkansas Senator Blanche Lincoln, which PennLive.com ran on May 15. Lincoln, a CSIG (Coalition to Stop Internet Gambling) co-chair, was last seen spouting nonsense on FOX News Huckabee and spent most of her PennLive op-ed to emit faux anti-gambling talking points that have become the former Arkansas Senator turned lobbyists calling card since she hitched her lobbying wagon to Sheldon Adelsons anti-online gambling group. Lincolns op-ed was simply a rehashing of several previous columns penned by CSIG (virtually every point having been debunked) and didnt receive much attention. Lincolns words likely rang hollow in Pennsylvania, where she is basically seen as nothing more than a paid lobbyist with no Pennsylvania connections throwing in her two cents where its not wanted. Bill sponsors make the case for legalization As is often the case when a newspaper prints an op-ed on a divisive issue, it allows for rebuttals, and the rebuttal PennLive.com printed was written by people with a lot of skin in the game, the sponsors of Pennsylvanias online gaming bill HB 649. Representatives John Payne and Nick Kotik penned the most significant op-ed on the subject in a May 27 op-ed in PennLive.com, which as this column demonstrates is quickly becoming the preferred theatre of war for dueling op-eds and opposing polling data. You can find breakdowns of the strongly worded Payne/Kotik op-ed here, here, and here. Editorial boards jump into the PA online gambling fray The newspapers themselves are also lining up and picking sides. In addition to the Payne/Kotik op-ed, the Penn Live editorial board has come out in favor of legalization. On the other side is the Delaware County Daily Times, which posted an editorial against online gaming, as did the Times-Leader. Polls on top of polls on top of polls In addition to the editorials and op-eds, Pennsylvanias newspapers have also been filled with polling data commissioned by both sides of the online gaming fight, which surprise, surprise, produced diametrically different results. The first poll appeared in early May, and purported to show Pennsylvanians were staunchly opposed to online gambling regulation. This poll was commissioned by CSIG, and a deeper look into the polling questions revealed some serious flaws in the methodology of the polling company, Harper Polling, which both Nate Silver and Nate Cohn have questioned in the past. As OnlinePokerReport.coms Chris Grove found, asking the same basic question but removing all of the extraneous statements about the ills of online gambling led to quite different results. In addition to Groves findings, a later poll commissioned by Caesars Entertainment, one of the companies pushing for Pennsylvania to legalize online gambling, showed support for regulation among the states residents. Ramifications Considering the amount of attention Pennsylvanias press is giving this issue, its a safe bet that online gambling isnt simply being talked about in the legislature. This appears to be the real deal, and online gambling is likely to be a major conversation in the legislatures budget talks. It also lends a lot of credibility to the buzz from inside the gaming industry surrounding online gaming expansion in Pennsylvania.
Pennsylvanias regulated gambling industry dates back to 1959 when the state legalized horse racing, but it was the legalization of slot machines in 2004 and table games in 2010 that turned Pennsylvania into a true gaming state. Despite its very short history as a gaming state, Pennsylvania has emerged as the second largest casino market in the country, trailing only the casino juggernaut that is Nevada in gross gaming revenue. However, stagnant revenues and increased competition from neighboring states has Pennsylvania once again considering further expansion possibilities. Horse racing in Pennsylvania In 1959, the Pennsylvania legislature passed the Race Horse Industry Reform Act. The bill legalized horse racing in the state, but it would take several years before dedicated horse racing tracks started popping up in the state. The oldest track still in operation is Meadows Racetrack and Casino, which first opened in 1963. Horse racing in Pennsylvania had very deep roots (Stephen Fosters ode to betting on the ponies, Camptown Races, was set in Pennsylvania) as horse racing thrived in the state throughout the 1700s and 1800s, even when prohibited by the legislature. But horse racing was eventually forced to throw up its hands in disgust at the states restrictions (limited to racing at fairs and other odd venues) in the 1900s, and most Pennsylvania stables simply raced their thoroughbreds out of state. By legalizing thoroughbred racing, the state kept that purse money in-state and was able to capitalize on the tax revenue the racing industry generated. Slot machines in Pennsylvania In 2002, gubernatorial candidate Ed Rendell made gaming expansion a centerpiece of his campaign. Rendells plan was to legalize slot machines and allow the states racetracks to apply for slot licenses, as well as creating a new license category for standalone slot casinos. Under Rendells plan, the revenue generated from the slot machines would go almost entirely towards easing property tax burdens and school funding, both of which were mounting concerns in the state. The legislature passed a version of Rendells plan in 2004, which Rendell happily signed. Under the bill, up to seven racetracks could apply for slot licenses, and the state would create five stand-alone slot casino licenses, and three resort casino licenses. Rendell noted at the time that slot machines wouldnt be a panacea, but the revenue generated from slot machines (estimated at the time to be $3 billion a year) would tally about $1 billion a year for the state, on top of the one-time licensing fees the state would collect from potential casinos. Table games in Pennsylvania The revenue from the slot machines was certainly helpful, and did offer a modicum of tax relief, but Rendells warning that slot machines wouldnt be a panacea was realized within a few years, likely hastened by the economic collapse of 2008, and by 2010 the Pennsylvania legislature was looking at further gaming expansion to help close their growing budget deficit and rising property taxes. The simplest and quickest fix would be the legalization of table games, and in 2010 the Pennsylvania legislature passed a bill that would allow the states existing casinos to add table games. Governor Rendell, the driving force behind slot expansion earlier in the decade, wasnt a proponent of table games, but he did the sign the bill, making sure to tell reporters at the time that he had mixed feelings about it. Rendells misgivings proved unfounded, as table games were seamlessly added to Pennsylvanias existing casinos, and Pennsylvania has become the second largest gaming state thanks to the $3 billion in gross gaming revenue the states 12 casinos generate each year. Online gambling in Pennsylvania In 2013, led by State Senator Tina Davis, Pennsylvania started looking into online gambling, but it wasnt until 2015 that iGaming talk really heated up. Representative John Payne, the Chairman of the House Gaming Oversight Committee, led the charge for iGaming legalization in 2015. Payne hosted a series of hearings on the subject and crafted HB 649, a bill that would legalize online gambling in the Keystone State. The Pennsylvania Senate also explored iGaming expansion and crafted a bill of its own, SB 900. The Senate bill included other potential gaming reforms but wasnt as industry-friendly as Paynes bill. Right now, there is still some hope that online gaming expansion will work its way into the 2015 state budget. Future expansion In addition to online gambling, the legislature also explored several other gaming reforms they felt could support the casino industry while also increasing state revenue. Among the gaming reform measures the legislature has discussed are:
Legalizing and regulating skill-based games.
Adding slot machines to off-track betting terminals.
Removing some restrictions on category 3 (resort casinos) license holders. What will the future hold for gambling in Pennsylvania. It appears that more options including online gambling are in the cards. How quickly we see new gambling opportunities open up remains to be seen. Photo by Steve Elgersma used under license CC BY-NC-ND 2.0
Pennsylvania Gov. Tom Wolf vetoed a Republican-backed budget proposal on Tuesday, perhaps giving new life to efforts to legalize and regulate online gambling in the state. Veto = good for internet gambling? While the discord between Pennsylvanias democratic governor and the heavily Republican legislation has not been good for budget negotiations, it might be good news for interests who would like to see online gambling in the state. Movement on any of the five bills that would regulate online gambling had come to a halt previously, and new gaming measures had not been included in the spending bill sent to the governors desk. Right now, the two sides currently dont see eye-to-eye on how the budget should be constructed. From an Associated Press story on the budget impasse: Wolfs veto means the state missed a soft deadline for funding the state government, although it will not result in massive shutdowns. At this point, Republicans and Wolf are going to be looking for ways to create revenue so that they can avoid future deficits that could range from $1 billion to $2 billion. They also need to find middle ground on tax increases that Republicans want to avoid and new education spending that Wolf campaigned on. One of the easy ways to generate revenue would appear to be the introduction of online gambling, which has not been very contentious in the legislature, at least as a general idea, if not in its actual implementation. Both Democrats and Republicans have introduced bills that would regulate online gambling, with the frontrunner to advance coming in the form of Sen. Kim Wards SB 900. A little bit of momentum So far, there hasnt been any direct talk of bringing Wards gaming bill which also includes other changes to Pennsylvanias brick-and-mortar casino industry back to life. But it doesnt take much of an imagination to see it as part of a budget compromise. Between licensing fees and taxes, online gambling has the potential to add tens of millions to hundreds of millions to state coffers, depending on the estimate you side with. One state senator Lisa Boscola said she believes the Ward bill has a chance to make it to the governors desk, although she opposes the bill. She said that in comments for a story at Lehigh Valley Live: Boscola hasnt been really involved in the online gambling debate so far, but has been lobbied by Sands Bethlehem; the Sheldon Adelson property is against online gambling regulation. An unscientific poll posted at Lehigh Valley Live shows that 80 percent of respondents are in favor of online gambling. While the results probably arent terribly important, in the grand scheme of things, it at least doesnt give the opposition more ammunition to oppose an online gambling bill. Still hurdles for bill to clear The bill, as currently composed, is still not really ready to go directly to the governors desk. A proposed tax rate of 54 percent is far too high and would need to be reduced to make online gambling viable in the state. Seven casinos have come out against parts of SB 900; they have made a proposal to drastically reduce the proposed tax rate. Republicans seem to be behind the bill, at least in concept, as leadership in both houses have supported online gambling legislation. Whether Wolf would sign an internet gambling regulation bill either on its own or as part of a budget is an open question. But if its something that adds money to the budget and hes not vehemently against it in principle, you have to figure the bill has a chance to get past Wolf as well.
Pottstown media outlet The Mercury has spoken out against the possible legalization of online gambling in Pennsylvania, citing a decline in gaming revenue both in and beyond the state. Fears of market saturation, diminishing returns The editorial comes at a potentially critical point for online gaming in Pennsylvania, which is dealing with a deficit of more than $1 billion. First-term Governor Tom Wolf, a Democrat, finds himself locked at odds with a Republican-controlled legislature over the states fiscal 2016 budget. Gaming on the eastern seaboard has hit its saturation point, wrote The Mercurys editorial board last week. More from the editorial: The cannibalization argument, again The editorial was the latest example of the idea that online gambling simply cannibalizes revenue from brick-and-mortar establishments. Thats a theory that has largely been debunked throughout the industry, despite the fact that it continues to surface from time to time from gaming interests and media outlets. Earlier this month, Tim Shea, the president of the Pennsylvania Horsemens Benevolent and Protective Association, penned a letter to the editor that made the rounds in several state newspapers. That letter also cited cannibalization as a reason to stay away from iGaming, even though the writer of the research said Shea was misinterpreting his findings. In fact, most in the industry now believe that online gambling is complementary to land-based casinos. Online gaming as a remedy? The editorial argues that regulating online gaming would have little impact on revenue in the state, despite the fact that the states casinos have largely dismissed the cannibalization argument and are asking for the ability to offer iGaming. Amid the states budgetary woes, many have heralded online gaming legislation as a means to triage the deficit without resorting to tax increases. But neither legislators nor gaming interests in the state have seen eye-to-eye on the specifics of iGaming. One particularly large stumbling block has been the proposed rate at which virtual casinos would be taxed. One bill, SB 900, proposed a gross tax of 54 percent for online gaming revenue. Casino operators, unsurprisingly, have criticized the figure as unreasonable. PAs casinos have instead voiced support for a rate of 15 percent, as proposed in HB 649. Flurry of PA online gaming bills in 2015 Five bills that include iGaming regulation have already been proposed by Pennsylvania lawmakers in 2015. Most of the bills, which were authored by both Democrats and Republicans, have garnered support among the state Senates Community, Economic & Recreational Development Committee. One such bill was sponsored by committee chair Kim Ward. Another was authored by the bipartisan duo of Representatives John Payne, a Republican, and Nick Kotik, a Democrat. Payne and Kotik also authored an op-ed article in support of online gaming, which appeared on the Harrisburg-based PennLive in May. Most of these bills contain other gaming measures unrelated to iGaming which are far more controversial for lawmakers and casinos. Its not clear that any of these bills will be the vehicle for online gambling regulation, at least in this legislative session. Legislators still deadlocked on state budget Wolf, who has long called for increased education spending, has maintained this position in the face of the looming deficit. Although Wolf ran on a campaign of lowering middle-class tax rates, news of the deficit spurred the governor to propose a round of tax hikes to compensate for the gap. But since Wolf unveiled that plan in March, Republicans have remained stalwart in their opposition, decrying the strategy as lofty and unrealistic. Most recently, Wolf vetoed an eleventh-hour budget proposal authored by Republicans, and the states budget currently hangs in purgatory. Meanwhile, rhetoric surrounding the issue has become increasingly mucky. Wolf drew Republican ire last week, when he blamed the party for the continued delays in negotiation. Will online gambling make an appearance in the state budget talks? Proponents are still waiting for that to happen. Photo by used under license CC BY-SA 2.0.
Seven Pennsylvania casinos announced that they oppose parts of a proposed gaming act and asked for a lower internet gambling tax rate, perhaps complicating regulation of online gaming in the state during this legislative session. Who wants work to be done on gaming bill? Gambling Compliance first reported (paywall) a letter sent by a group of casinos that oppose SB900 a bill introduced by Sen. Kim Ward that would legalize and regulate online gaming in the state. Internet gambling is viewed as one of the ways potentially to chip away at a deficit of more than $2 billion in Pennsylvania. The state budget is supposed to be due in just a few days, on June 30, but lawmakers and Gov. Tom Wolfe remain at an impasse. While the letter doesnt seem to be a death knell for a gaming act passing this year, it certainly illustrates that there are issues that likely need to be resolved before such a bill passes. While brick-and-mortar casinos in the state are generally behind online gaming, interested parties in the state differ on the tax rate associated with the bill. The group of casinos that penned the letter which you can read at Gambling Compliance runs the gamut across Class I, II and III casinos and accounts for half of the current B&M locations in the state:
Presque Isle Downs
Valley Forge Earlier, Sands Bethlehem of the Sheldon Adelson empire voiced its displeasure with the online gambling portion of the bill. What the casinos want On internet gambling, the casinos suggest a much lower tax rate than the proposed 54 percent tax rate which would be among the highest of any regulated jurisdiction in the world. From the letter: The tax rate, though, appears to be far from the most controversial portion of the bill, at least from the perspective of these casinos. The casinos are also against provisions in the bill that would:
Allow slots at off-track betting facilities
Allow video-style gaming at bars
Create an admission fee for Category III licenses In the letter, the casino group offered this: And later: Despite a lot support for some sort of online gaming regulation in the state and the revenue it would create, it appears casinos will not back a carve out just the internet gambling portion of the bill. Other than differences of opinion on the tax rate and questions on implementation, getting to a yes on online gaming would seem to be much easier than passing an over-arching bill. Bill is not done, yet There has been little movement on the gaming bill since a hearing in front of Wards Senate Community, Economic, and Recreational Development Committee last week. And Ward even said in an interview last week that she does not think her gaming bill has a chance of making it into this years budget. But a story at the Daily Times painted a slightly more optimistic view on the chances for online gaming regulation. In reality, little progress has been made on anything associated with the budget. A Penn Live editorial says the Wolf and the Republican-run legislature are still miles apart on many key issues. At this point, a budget passing by the June 30 deadline appears unlikely hope is waning for that possibility, according to an Associated Press story. That may give casino interests and lawmakers time to get on the same page on the gaming act and online gambling. Either way, however, time is running out for the possibility of internet gaming regulation to pass in 2015. Photo by Mark used under license CC BY 2.0.
Pennsylvania casinos experienced less-than-stellar revenue numbers in August, and while it may be a blip on the radar, it could mean redoubled efforts for legalizing online gambling. The August numbers = not great news Casino revenue had generally been humming along in Pennsylvania; if operators werent growing, things were generally at least staying level. But August was not a very good month for the gaming industry in the state. More from the Morning Call: According to the MC, Mount Airy saw a nine percent reduction in revenue year over year, while Sands had a poor showing just a month after a record July. Still, its not a reason for concern, at least according to the PA gaming board, which attributed the YoY to decline to the fact that there was one fewer Friday in August this year than there was in 2014. PA casinos want more revenue, not less Whether the states casinos are worried after the poor August showing, or if they agree with the gaming boards assessment, is unclear. What we do know is that there are concerns that growth for brick-and-mortar casinos has already plateaued. Coupled with last months numbers, could that result in an increased lobbying push from the states gaming interests? Might there be more willingness to back an online gambling-only bill, instead of a more wide-ranging gaming bill that affects slot machines and an increased ability to serve liquor? If a bill doesnt happen now, the possibility of internet gambling regulation is likely shelved until 2016. So its feasible that the poor month could increase casinos sense of urgency on the matter. Where online gambling sits in the budget showdown: Still on the sidelines The slow revenue month comes in the midst of the ongoing budget impasse in Pennsylvania, which has now surpassed two months in length. It is still not out of the realm of possibility that online gambling could become a part of the solution in bridging the gap between Democratic governor Tom Wolf and Republican legislators, who still havent found much common ground on expenditures, or how to fund them with revenue. Right now, the focus is on passing a stopgap bill to fund the government in the short term. From the past few months, we have learned that:
Online gambling remains a fairly non-controversial way to generate state revenue.
Nearly all casinos (Sheldon Adelsons Sands Bethlehem excluded) are in favor of iGaming, they just disagree with some of the details in gaming legislation that has been introduced. Even so, one bad month is likely not enough to push PAs casinos into panic mode. Online gambling legislation is a long-term play, and casinos will back an iGaming measure only if it is in their best interest moving forward, not as a quick revenue fix. Photo by Antoine Taveneaux used under license CC BY-SA 3.0.
The topic of internet gambling is staying out of the heated debate surrounding the Pennsylvania budget impasse between Republican legislators and Gov. Tom Wolf, which might be the best thing online gaming proponents in the state could hope for. No lack of disagreement, but its not about gambling Why is that possibly the case? As the two sides become more entrenched on their positions on other matters, online gambling may look like an easy win for both sides, eventually. Wednesday the start of the second week of little progress being made on a budget being passed was either a quiet day or things were heating up, depending on who you listened to. Either way, the end result was nothing being accomplished. That appears to be the status quo as the state has blown past a soft deadline (June 30) to pass a budget while Republicans and Democrats continued to find little common ground. Heres a non-exhaustive list of some of what the two sides dont agree on as they try to make a dent in a deficit that exceeds $1 billion:
Taxes: Wolf wants to raise both income taxes and sales taxes, as well as tax Marcellus Shale gas drillers. Republicans want no new taxes.
Education: Wolf wants more money for education funding, in line with campaign promises he made. Republicans would increase education spending, as well, just by not as much.
Liquor stores: Republicans want to privatize the state-run liquor store system, while Wolf has vetoed a bill that would have done so. A television commercial backing Wolfs budget started airing, as well, which is only likely to make the two sides dig in even more. You can watch that below:
Something they can all agree on? In the meantime, online gambling has not really been on the table of late. Republicans didnt send a gambling bill that included iGaming to Wolf, not did they include it in the budget bill. At the end of the day, online gambling as an idea isnt that controversial in Pennsylvania. Both Republicans and Democrats have introduced bills that would allow for internet gambling, and only one casino opposes the concept. Implementation and tax rates are the major stumbling blocks for passing iGaming regulation, but solving those issues does not appear to be a steep climb. And what do both Republicans and Wolf want to do? They want revenue to fund expenses in the budget and help to cut down the deficit. Online gambling could fit the bill. Between licensing fees and taxes, Pennsylvania stands to generate lots of revenue should it legalize online gambling: north of $200 million in year one, with more than that expected in a mature market. Thats a hefty bite out a deficit estimated to be $1.2bn. Rep. John Payne, chair of the House Gaming Oversight Committee, might know something that the rest of us dont. According to a report last week, he said online gambling has a pretty good chance of getting approved. That comment came despite any visible lack of movement on the issue. For the prospects of online gambling, that might be the best scenario: to stay off the radar and wait quietly for an opportunity to fill in a gap between the proposals from Wolf and the states Republicans.