With 100 days having passed since last fiscal year’s budget expired and the state government in partial shutdown, Pennsylvania lawmakers are urgently seeking options that would result in new revenue to close a gaping budget deficit.
The legalization of some form of internet gaming is moving up on the list of options as the budget stalemate drags on. There are five online gaming bills spread between the two chambers of the state General Assembly, including measures that would legalize only online poker and others that would incorporate a slate of online house-banked table games as well as poker.
Last week, state House Republican leaders announced that expanded gaming could help the budget deficit, proposing not only iGaming but slots at airports and off-track betting sites. Statements from House Majority Leader Dave Reed and other top Republicans indicated that among lawmakers, legal iGaming is preferable to a tax increase.
“We’re faced with some very tough decisions right now,” Reed told Pittsburgh’s KDKA radio station. “Before we look at increasing taxes on working families, we have a responsibility to look at every other possible revenue source out there, and expanded gaming is certainly one of those possibilities.”
According to a report in the Associated Press, Reed is giving new gambling, including iGaming, a prominent place in the budget discussions. He told the news service the possibility of iGaming should be explored before the legislature raises taxes, commenting just after the House defeated a $2.4 billion tax increase presented by Governor Tom Wolf.
“I think we need to have a discussion first on what other revenues are on the table (before raising taxes),” Reed told the AP. “We need to come to a conclusion on liquor reform. We need to address cost drivers like our pension system. We need to look at gaming options.”
The Wolf administration has expressed openness to expansion of gaming as part of a comprehensive package to reduce the multibillion-dollar deficit.
A study sanctioned by the state concluded that online poker could be worth up to $129 million annually once it reaches maturation, and that house-banked online casino games could yield another $178 million annually.
Lawmakers are looking more closely at additional gaming options partly because land-based gaming revenues from the state’s 10 casinos have been on a decline, even though capacity is about to increase with a new casino planned for Philadelphia.
The biggest roadblock to passage of one of the bills is disagreement among lawmakers on the tax rate. Rep. John Payne, chairman of the House Gaming Oversight Committee, sponsors a bill providing for a full slate of online casino games with a 15 percent revenue tax to the state. Its counterpart bill in the Senate calls for a 54 percent tax, about the same as levied on slots at the land-based casinos.
Payne’s committee was slated to hold a hearing on internet gambling next week, and the chance of his bill getting out of committee got better with the appointment to the panel of four new Republicans who are open to iGaming.
Commenting to the Associated Press, state Senate President Pro Tempore Joe Scarnati said the state government shutdown has added new urgency to the iGaming debate. “All of a sudden,” Scarnati said, “gaming doesn’t look that bad.”
