Online Gambling Bill Introduced and Hearing Scheduled in PA

Steve Ruddock February 25, 2015

It looks like Pennsylvania will be making a serious push for online gambling expansion in 2015. Representative John Payne (R-106th District) has announced plans to introduce an online gambling (HB 649). Payne is the chairman of the House Gaming Oversight Committee, which just so happens to have a hearing on online gambling scheduled for April 16th.

Payne’s bill has yet to be officially introduced, but in a statement issued on his website he did offer up some of its key points, saying the bill would make online gaming licenses available to currently licensed brick & mortar gaming operators. Online gambling licenses would cost $5 million under Payne’s proposal and operators would be taxed at 14% of Gross Gaming Revenue.

Payne projected iGaming would bring in $120 million in its first year, and upwards of $300 million down the road – meaning PA would take in $16.8 million to $42 million each year on top of the licensing fees.

In his statement Payne didn’t mince words, making several cases for legalization, ranging from consumer protections, to revenue, to a crackdown on illegal operators:

“Right now millions of Americans, including Pennsylvanians, participate in illegal online gaming where no regulation currently exists,” said Payne. “By enacting effective state policy, we can help curb the illegal market while ensuring strong safeguards are in place to protect consumers.”

“The implementation of legalized online gaming in Nevada, New Jersey and Delaware demonstrates the technologies exist to regulate Internet gaming safely and effectively,” he said. “This legislation is the first step toward ensuring future growth as the industry expands.”

A bipartisan bill

Payne will likely have bipartisan support for his measure in the Gaming Oversight Committee, as Representative Tina Davis (D-Bucks County), a long time advocate for online gambling expansion, is also a member of the committee. Several other Democrats also seemed on board with iGaming expansion during a hearing in the House Democratic Policy Committee last year.

Davis, who kick started online gambling talk in 2013 when she introduced the state’s first iGaming bill took a backseat during Pennsylvania’s 2014 online gambling talks, but is still expected to be a vocal advocate for legalization, and could act as a perfect wingman for Payne in the Gaming Oversight Committee despite coming from the opposition party.

Other known online gaming supporters in the Pennsylvania legislature are Representative Mike Sturla, who spearheaded a resolution in the legislature last year opposing RAWA, and Senator Edwin Erickson who authored the state’s 2014 online gambling bill.

Adelson looms large in PA

The big question in Pennsylvania is: What will Sheldon Adelson do?

Adelson, who appears to be singlehandedly fighting online gambling expansion owns and operates one of Pennsylvania’s most lucrative casinos, Sands Bethlehem. Adelson has been busy pushing for an online gambling ban at the federal level but he’s also been active at the state level where his lobbyists have taken credit for the lack of progress in California and other states.

However, at a hearing in front of the Senate Committee on Community, Economic and Recreational Development Committee last June, Adelson’s right-hand man Andy Abboud’s comments were generally dismissed, particularly when he made the eyebrow raising comment that the complete absence of evidence of underage gambling is proof it’s going on.

Las Vegas Sands motives were also openly questioned by Senator Randy Vulakovich, who closed his exchange with Abboud by saying, “you’re against online gambling but you’re in the gaming industry… interesting.”

The new Governor may not be on board

Another potential hurdle will be the state’s new Governor Tom Wolf. Wolf is trying to close Pennsylvania’s budget shortfall but ruled out gaming expansion during his campaign.

How deep Wolf’s opposition to gaming expansion (of any kind) runs is unclear, and his desire to overhaul the income tax code (and implement several new taxes) in the state has many people in iGaming hoping he will compromise on gaming to get a deal done.

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