Pennsylvania has had an on again off again relationship with online gambling this year, and right now it looks like the two might be ready to finally tie the knot.
With the developments, or lack thereof, over the past week, virtually every article discussing Pennsylvania’s stalled budget talks has focused on online gambling. The House Gaming Oversight Committee is also holding a hearing next week, although the agenda has not been set yet.
The state’s budget is currently over a hundred days past due — the longest delay in Pennsylvania history, and with Governor Tom Wolf’s proposal being roundly defeated in the legislature last week, it’s back to the bargaining table for the first term Democrat governor and the solidly Republican legislature.
Online gambling, and a few other potential gaming reforms, seem to have the most bipartisan support, and could be a good starting point for budget compromise between the two sides.
The points of contention
Publicly, Governor Wolf remains steadfast in his belief that he was elected last year on a mandate to increase funding for public education and end the state’s ever-increasing property tax trend. Wolf’s plan relies heavily on taxes, something the legislature is firmly against. The legislature is looking towards reforms, ranging from liquor to pensions to online gambling.
Speaker of the House Mike Turzai (R – Allegheny) said online gambling had “bipartisan support,” and during several hearings in the spring and summer, online gambling seemed like a very noncontroversial issue, with the only point of contention being how heavy handed the state should be when it comes to taxing the industry.
Speaking at the Washington County Courthouse on Wednesday, Governor Wolf made it clear that while he is willing to compromise, the budget must be comprehensive, saying the legislature wants to close a $2 billion shortfall with smoke and mirrors.
“Is it better to have a short-term solution fix that feels good, even though in the long run you’re not going to have any human services or have a grossly underfunded education system, or do we deal with this right now?” Wolf asked rhetorically. A spokesman for House Republicans agreed, saying that online gambling would be just one part of a budget deal.
While he remains open to it, Wolf is also convinced that online gambling and other gaming reforms will not close the deficit.
“I haven’t heard anybody say that that is the end-all be-all to our budget deficit,” Wolf said during an interview on KDKA-AM. “I’m open to a conversation on that, and I presume you could design it to bring in some revenues, but not enough to plug a $2 billion deficit.”
Tax revenue from online gambling wouldn’t be realized until late 2016 at the earliest, but the state would see a nice early windfall from the upfront licensing fees, which could produce over $50 million. Representative John Payne, who sponsored an online gambling earlier this year (HB 649) and held multiple hearings on the topic, believes the state could take in $120 million in the first 12 months of online gambling, the bulk of which would be from licensing fees.
Of course, not everyone is on board with online gambling expansion, and the usual refrains have started pouring in, with the same tired, canned arguments against any type of gambling expansion.
Interestingly, Sheldon Adelson, who owns the Sands Bethlehem Casino in the state, has been relatively quiet in Pennsylvania. Most of the opposition is coming from anti-gambling groups such as Stop Predatory Gambling, a group that opposes any form of gambling, and would end state lotteries if given the opportunity.
Paul Boni, a Stop Predatory Gambling board member, told Philly.com, “The state government is addicted to gambling just as much as the people in the casinos,” he said. “It’s too tempting to get away with exploiting people.”
Pennsylvania has also turned to gambling twice in the past dozen years already, which has some people concerned the state is going to the gambling well one too many times. Speaking to Philly.com, Chris Borick, a political science professor at Muhlenberg College: “It’s really quite a path we’ve gone down, from discussing major shifts in the tax structure… to shaking the gaming tree one more time to see if it bears any fruit.”