Facing a huge budget deficit and not wanting to burden their citizens with higher taxes, Pennsylvania lawmakers may be nearing a favorable vote on online gambling legislation.
The House Gaming Oversight Committee is scheduled to meet on Wednesday and several reports have suggested that the legislators will vote on whether or not to approve an igaming bill introduced by Sen. Kim Ward earlier this year. SB900 would legalize online poker and gambling, allowing Pennsylvania residents to wager at sites launched by any number of the state’s dozen casinos.
Budget talks have reached an impasse that’s nearing four months in duration. With a reported $2 billion deficit, Pennsylvania lawmakers are searching for other avenues besides a tax hike to raise revenue and online gambling may finally get the nod.
The gaming committee includes four new members appointed in early October who are perhaps a bit more igaming-friendly than those committee members recently replaced, triblive.com reported. It has led some to suggest that committee chairman Rep. John Payne has stacked the deck in favor of the online gambling legislation that he supports. However, the appointments were made by House Speaker Mike Turzai.
The igaming bill calls for licensing fees of $5 million and tax rates as high as 59%. The state’s land-based casinos currently pay a 55% tax on revenue from slot machines and 14% on table games.
Payne indicated that the proposal, if approved, could provide $120 million during the first year. That figure could reach considerably higher totals annually further down the road when other ingredients are added to the mix such as slot machines at airports.
Shift in Thinking
It appears that the tide has turned with regard to Internet gambling legalization in Pennsylvania due to the budget shortfall. A tax plan proposed by Democratic Gov. Tom Wolf was rejected by the House recently, further pointing to the need to raise revenue elsewhere.
Also a factor in play is that revenue from the Keystone State’s 12 casinos has experienced a downturn the last couple years. The timing may be right for online poker and gambling to pick up the slack, as well as become a means for perhaps balancing the budget.
Just a few months ago, igaming legislation was still on the back burner in Pennsylvania. But because of the threat of a possible government shutdown, at least partially, due to the budget deficit, online poker and gambling has gotten greater attention.
“All of a sudden, gaming doesn’t look that bad,” said Senate President Pro Tempore Joe Scarnati.
During an online gambling hearing in June, estimates on a launch date following the approval of igaming legislation were set at 9-12 months. Using such an estimate, and considering how slow the wheels of progress tend to turn in such matters, it is difficult to see Pennsylvania join Nevada, Delaware and New Jersey in the regulated igaming space before late 2016, and perhaps 2017 would be more likely.