Pennsylvania Online Gaming Hopes Rekindled After House Passes Budget Funding Plan

Steve Ruddock October 18, 2017 1949 Reads
Pennsylvania Online Gaming

After multiple failed attempts to fund the budget it passed way back in June, the Pennsylvania legislature took a big first step towards righting its fiscal ship this week.

In a late night vote, the Pennsylvania House of Representatives passed a $1.5 billion budget funding plan on Tuesday. The package passed by a vote of 102-88.

The imperfect package, that borrows heavily from the Tobacco Settlement Fund and imposes new taxes on fireworks and online sales, will now move over to the Senate where it’s fate is unclear, but far better than a previous plan the House sent over.

If the Senate and House can reach an agreement, the only loose end remaining is the gaming reform package the legislature has been trying to hatch for several years.

Several sources close to the situation have indicated the gaming reform package will only be addressed once the other funding mechanisms were hashed out.

With last night’s passage of the funding plan, there is renewed optimism that the state’s months-long budget nightmare will come to an end, and online gaming supporters will finally have something to cheer about.

Urgency is an understatement

Calling the current budget situation in Pennsylvania urgent would be like calling Celtics’ star Gordon Hayward’s opening night ankle injury a mild sprain.

Because of the legislature’s inaction, the state has already received a credit downgrade, and essential services are being funded through a patchwork of borrowing and budgetary shell games that cannot go on in perpetuity.

State Treasurer Joe Torsella is balking at issuing the state more short-term loans to plug budget holes.

As it stands, Pennsylvania is living paycheck to paycheck and running out of options when it comes to meeting its obligations.

The Wolf gambit

Following a testy legislative session earlier this month that concluded with the legislature adjourning without passing a funding plan, Governor Tom Wolf indicated he would take matters into his own hands.

Wolf’s announced plan was to borrow from future sales generated by Pennsylvania’s state-run liquor system.

That is a solution that is anathema to many Republicans in the legislature.

Under Wolf’s proposal, the budget would be patched by borrowing against these future sales for a period of 20 years; a move that would keep control of liquor in the hands of the state government for that period of time, effectively undercutting a strong and ongoing Republican push to privatize liquor sales in the state.

As if there wasn’t enough urgency, Wolf’s proposal likely lit a fire under supporters of privatizing liquor in the state.

What’s in the gaming bill?

As noted above, the general consensus is the gaming reform will have to wait until the rest of the budget issues are resolved. From there the gaming reform bill would fill in the remaining $200 million or so.

The gaming reform bill is wide-reaching.

The key components of the most recent version of the bill:

  • Legalizes online poker and casino games;
  • Authorizes online lottery sales;
  • Legalizes daily fantasy sports;
  • Authorizes VGTs at truck stops;
  • Authorizes satellite casinos;
  • Reinstates the local share tax the PA Supreme Court ruled unconstitutional last year.

The online gaming, lottery, and DFS components are largely noncontroversial and make up the immediate core revenue components. Those parts are unlikely to be removed or altered in a significant way.

The fate of the pared-down VGT proposal and satellite casinos are still up in the air.

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