As the 2015 legislative session wore on, Pennsylvania was seen as the United States’ best chance to pass an online gambling bill this year. The commonwealth had momentum on its side, and there were only pockets of opposition to online gaming expansion.
But the 2015 window for iGaming appears to be closing as the state legislature and the governor continue to battle over how the state can solve its budget deficit — the state’s budget is now some 50 days past due — and lawmakers began squabbling about the specifics of the bill.
Expansion for iGaming hit a slight speed bump when the Senate bill (SB 900) differed from the bill put forth by the House (HB 649), most notably in the amount of taxes that operators would pay, 54% compared to 14%.
These differences aren’t irreconcilable, but another issue has been hanging over possible iGaming expansion.
It’s the budget, stupid
The real hang-up is the budget.
The legislature appeared to be hoping that online gambling revenue could be an alternative to one or more of Governor Tom Wolf’s proposals. The governor doesn’t look like he is interested in a straight up tradeoff.
Wolf continues to push for new taxes on natural gas production and cigarettes, as well as comprehensive reform of the state’s income tax code. The Republican-controlled legislature has different ideas, as they are pushing for pension reform as well as exploring new forms of revenue such as expanded gaming options.
The legislature might want to use iGaming as a tit-for-tat proposal, while Governor Wolf appears to see it as an “in addition to” type of measure.
Is gaming expansion even on the table?
Depending on who you ask, the budgetary impasse is either a positive or negative for online gaming, evidenced by a recent GamblingCompliance column (paywall) where opinions were split on what the delayed budget means.
Even though they concede the issue has been pushed aside in the state’s budget talks, some of the stakeholders and the supporters of online gambling in Pennsylvania still feel there is a decent chance iGaming expansion could be included in the final budget.
According to GamblingCompliance’s reporting, several stakeholders and gaming lobbyists believe online gaming expansion (and perhaps the addition of slot machines at OTB parlors throughout the state) is still on the table, even though the negotiators for the governor and the legislature haven’t brought them up “at all.”
The general feeling among the various interests seems to be this: The longer the budget impasse goes, the more likely alternative options will be considered.
Additionally, if the legislature has to cave to some of Wolf’s demands, iGaming could morph into an “in addition to” policy for the legislature, instead of the alternative they hoped for.
Other stakeholders and lobbyists are less optimistic about the prospects for 2015, such as Penn National (which is otherwise bullish on iGaming expansion), and have more or less written off gaming expansion this year.
Furthermore, the governor has recently stated that talks between himself and House Majority Leader Dave Reed have been somewhat productive, and he feels they are “moving in the right direction.” If that is in fact the case, there would be little need to find alternative revenue streams such as gaming expansion.
Will iGaming expansion reappear in 2016?
Even if iGaming is excluded from the final version of the 2015 budget, Pennsylvania will almost certainly revisit the topic in 2016.
The state’s casinos are in favor of iGaming expansion (with the exception of the Sheldon Adelson-controlled Sands Bethlehem Casino) and several have entered into iGaming partnerships.
Representative John Payne, the Chairman of the House Gaming Oversight Committee, is a staunch supporter of online gambling, as is his counterpart on the committee, Democrat Nick Kotik.
Furthermore, several senators emerged as supporters of online gaming expansion when SB 900 was discussed at length at two separate hearings.
It all adds up to the idea that if iGaming fails, it will be back for round two next year.