Pennsylvania iGaming Bill Gets Mixed Reaction in Senate Hearing

Pennsylvania’s legislature held its second hearing in as many weeks to consider regulated online gaming in the state, in a session that was a bit of a mixed bag for the prospects for iGaming and online poker.

The Pennsylvania Senate Community, Economic and Recreational Development Committee held a two-hour meeting dedicated to gaming in the state on Wednesday, including consideration of SB 900, a bill put forth by top Senate Republicans to legalize and regulate iGaming.

You can watch the hearing here.

While many of the panelists seemed to be in favor of iGaming in the state, some of the senators sitting on the committee seemed decidedly less committed, despite the fact that a high-ranking Republican and chair of the committee — Kim Ward — sponsored the bill.

A good start

Pennsylvania Gaming Control Board Executive Director Kevin O’Toole brought an informed and optimistic opinion on Pennsylvania iGaming to kick off the meeting.

“If the General Assembly authorizes internet gambling, the board is confident that this activity can be effectively regulated,” O’Toole said.

Other points brought up by O’Toole:

  • He noted that Nevada, New Jersey and Delaware have had iGaming for two years to great success, from a security standpoint. “Security involved in their gaming systems seems to be working. I would envision a system in Pennsylvania to be similarly successful.”
  •  In a Q&A session after his prepared statement, he noted that geolocation — ensuring only people in Pennsylvania’s borders are using iGaming sites — is “impressive technology.” And he said age verification — ensuring minors aren’t playing online — is very achievable.
  • He lobbied for an amendment allowing Pennsylvania to enter into interstate agreements for iGaming — like the one between Delaware and Nevada. As he mentioned, interstate compacts allow for increased liquidity and more possibility of success for online poker rooms opening in Pennsylvania.
  • He asked that any legislation give the PGCB “the authority to adopt temporary regulations, to deal with new online games that are developed in the future.”
  • He said that iGaming could be up and running within a year of an online gaming bill passing, in a best-case scenario.
  • He doubted the efficacy of an “in-person” requirement that would require players to visit brick-and-mortar casinos in order to sign up for an online gaming account.

Also on board

Other witnesses that were generally on the side of regulated iGaming:

  • Kevin Kile, Director of the Office of Racetrack Gaming for the PGCB: “I don’t believe that iGaming will have significant impact on the racing industry, or pari-mutuel wagering.”Later, during Q&A, he backtracked a bit, after questioning from Senator Thomas McGarrigle. He also said he believed that iGaming could allow for cross-promotion possibilities for race-track casinos and online gaming sites.”
  • Michael Cruz, Chief Technology Officer for the PGCB, echoed O’Toole’s sentiment that Pennsylvania could effectively create a regulatory platform, based on the New Jersey model.

The prepared statements of the witnesses can be accessed via Ward’s website.

Some pushback

Most of the testimony seemed to be based on trying to advance the bill, in time for this legislative session. But that sentiment was not unanimous from Senators sitting on the committee.

“I think it would be prudent for us to really evaluate the impact that internet gaming would have on our bricks-and-mortar casinos throughout the commonwealth,” said Senator Sean Wiley, a Democrat who sponsored a different bill dealing with iGaming. “I also think, as indicated from some of the questions already this morning,that there are so many unknowns on the rollout.”

Concern was expressed by Wiley as well as Sen. Larry Farnese (a fellow Democrat) that iGaming would hurt B&M casinos, although the panel generally dismissed that idea, noting that other states had learned that many iGaming customers were not regular casino visitors. Senator Robert Tomlinson echoed those thoughts, saying he believes that New Jersey online gaming has hurt casinos in western Pennsylvania. One casino has lost 20 percent of its business because of iGaming to the east, according to Tomlinson (although it’s not clear where that data was coming from). Tomlinson, though, is a co-sponsor of the bill.

What’s next?

If iGaming is going to happen in Pennsylvania, it needs to happen in time to be included in the state budget, which is due at the end of the month. The state is facing a serious budget shortfall, and iGaming would be a relatively easy way to generate revenue rather quickly.

However, Ward sounded pessimistic about the bill’s chances in a story at the Pittsburgh Post-Gazette. She told a reporter that she does not expect an iGaming bill to bass before the June 30 deadline:

“Right now we’re working on a budget in the Senate that does not include any money from gaming, whether it be Internet gaming, whether it be [off-track betting] — new gaming, new ideas,” Ms. Ward said.

Does that mean the end of the road for iGaming, at least for 2015? We’ll have to wait until the budget is finalized and online gaming is taken off the table entirely to find out.