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The letter to the House on iGaming
Pennsylvania State Senator Robert Tomlinson (R-6th District) recently wrote a letter that urges caution and a measured approach to an omnibus gaming expansion passed on two different occasions by the House.
Tomlinson said he would like the state to fix an unconstitutional casino tax on its own, before dealing with other gaming issues. To date, the Senate has not acted on anything other than that tax fix.
One of those issues is online gambling (alongside daily fantasy sports).
‘Stakes are too high’
Tomlinson devoted an entire section of his lengthy letter to online gambling, saying the “stakes are too high to get it wrong and assumptions and projections offered to date are deeply flawed.”
His three main concerns are:
- Cannibalization of revenue from PA’s 12 existing casinos.
- A lack of protection for underage users and problem gamblers.
- Revenue projections for online gambling that do not mesh with reality.
Of those, cannibalization appears to be Tomlinson’s biggest concern. From the letter:
“We face the very real risk the Commonwealth will actually lose revenue as a result of the introduction of Internet gambling (at the significantly lower tax rate proposed) and the potential to siphon gaming dollars away from our bricks-and-mortar casinos.”
Are Tomlinson’s concerns valid?
According to Online Poker Report’s Steve Ruddock, most of his concerns have already been debunked. That’s particularly true of the cannibalization argument for iGaming:
Tomlinson’s views are not shared by most of the casino corporations operating in Pennsylvania. In late October, nine of the state’s 12 casinos sent state lawmakers a letter supporting online gambling legalization. …
Nor are his concerns borne out by the situation on the ground in New Jersey, where to an operator, every land-based casino views online gambling as beneficial to its land-based business.
Online gambling is understood by much of the gaming industry to help activate relapsed casino patrons or attract users who weren’t visiting land-based casinos.
Letter sets the stage for 2017
Pennsylvania’s legislature will tackle gaming provisions — including online gambling — next year.
Tomlinson’s letter sets the stage for lawmakers and interests in the state that want to slow down on online gambling — or do nothing at all. Meanwhile, proponents will continue to seek to pass language that would regulate online gambling and generate revenue for the state.
At this point, it’s not clear which side will have the upper hand.