Interest Group Claims Pennsylvania Online Gambling Would Hurt Horse Racing, Cannibalize Casinos

An interest group representing part of the horse racing industry in Pennsylvania has come out against legislation that would legalize and regulate online gambling in the state.

The ‘problem’ with Pennsylvania online gambling

The opposition came in the form of a letter making the rounds in state newspapers (here and here) penned by Tim Shea, the president of the Pennsylvania Horsemen’s Benevolent and Protective Association, which includes horse owners, trainers and other personnel.

The key point in Shea’s letter is the often used argument that “internet gambling cannibalizes brick and mortar establishments,” a stance that has pretty much been established as false in the gaming industry.

Here is some of what he wrote:

Each year, Pennsylvania’s agriculture and horse racing industries pour billions of dollars into the state economy and support thousands of jobs. These benefits are being threatened by state Senate Bill 900, which would allow for Internet gaming.

Since Pennsylvania expanded gambling in 2004, racetrack casinos have designated slots revenue to the Race Horse Development Fund, leading to important growth in our horse racing industry without relying on taxpayer dollars. … Senate Bill 900 would allow Internet gaming to bypass this fund, which would damage much of the progress made since 2004, when expanded gambling was designed to rescue Pennsylvania’s horse racing industry.

A recent study published in the University of Nevada-Las Vegas Gaming Research and Review Journal found that Internet gaming cannibalizes commercial casino revenues by 27 to 30 percent. In Pennsylvania, this could have a devastating impact. …

Internet gambling has its place, but it shouldn’t hurt Pennsylvania farmers and working families.

Not quite right on the numbers

The problem with Shea’s letter? He’s not interpreting the research he cited correctly, even according to the author of said study:

So far, there has been little formal opposition to the introduction of online gambling in the state. There have been questions raised by some PA legislators about online gaming as well as divisions on:

But almost every casino in the state — including the racinos based around horse tracks — support iGaming in some form. The only casino against iGaming is Sands Bethlehem, the property of staunch online gambling opponent Sheldon Adelson.

The latest on the iGaming bill

Right now, SB 900 remains in limbo. It was not part of a budget that the legislature’s Republicans sent to Gov. Tom Wolf, which was promptly vetoed.

Had the budget been passed, internet gambling would likely have been off the table until later this year or 2016. As it is, the vetoed budget gave internet gambling new life, as it is one possible vehicle that the state can use to generate revenue and attempt to chip away at a deficit that surpasses $1 billion.

There has been no movement on the internet gambling front since a committee hearing that addressed SB 900 in June. But Rep. John Payne, chair of the House Gaming Oversight Committee, “says online gaming has a ‘pretty good’ chance of approval,” according to a recent report.

For now, Republicans and Democrats are still at an impasse on the state budget. As long as the stalemate remains, there is still a chance that online gambling gets back in the discussion.

Photo by Taz used under license CC BY 2.0.