What To Watch For As PA Closes In On A Budget And Legalizing Online Gaming
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After giving online gaming watchers a small heart attack at the beginning of October, the Pennsylvania legislature returned to work last week and it looks like calmer heads have prevailed.
The Pennsylvania House of Representatives managed to hammer out the framework for a budget funding package last week, and unlike a previous effort, the package seems reasonable enough for the Senate to consider.
In a press conference last week, Pennsylvania State Senator Jake Corman said: “If all the stars align we’ll be prepared to do all that [pass a budget and a gaming reform bill] and be done by Wednesday.”
Corman isn’t the first Pennsylvania lawmaker to make such an assertion, but the legislature ran out of runway weeks ago, and needs to act.
The legislature’s inaction has the state heading towards a fiscal cliff, and Governor Tom Wolf threatening to enact policies that are ideologically far worse than the compromises the hardliners in the House have so far been unwilling to accept.
Still, the Pennsylvania House’s tenacity to kick the can down the road cannot be understated, so this is the mandatory part of the column that cautions against counting unhatched chickens.
How gaming fits into the revenue package
The revenue package, HB 542, passed by the House of Representatives is expected to be mildly altered by the Senate before it’s sent back to the House for final approval.
Once the major funding bill is completed, the legislature is expected to pass a comprehensive gaming reform package to fill a remaining $250 million or so budget deficit.
The revenue package will be the focal point, but it could be the gaming reform bill, HB 271, that serves as a barometer for the budget funding package.
A version of the gaming reform package is currently in the Senate Rules Committee, which is not scheduled to meet this week. If the committee is convened, and HB 271 is amended and passed by the committee, that would be a clear indication that Pennsylvania is about to cross the finish line, and put this nightmare behind them.
The latest gaming reform plan
Make no mistake about it, HB 271 will need to be amended.
The House plan requires gaming to provide $265 million, a number Corman called “aggressive,” but put the possible discrepancy in gaming funds (previous gaming reform packages were in the $200-$250 million range) into perspective, noting, “In the scale of a $33 billion revenue package that funds our state budget, you’re only talking about a couple hundred million here, so it’s a fraction of what we need to achieve.”
The latest reports indicate the gaming reform bill includes:
- Legalization of online poker and casino games;
- Authorization of online lottery sales;
- Legalization of daily fantasy sports;
- Authorization of satellite casinos;
- Authorization of tablet gaming at designated Pennsylvania airports;
- Reinstatement of the local share tax the PA Supreme Court ruled unconstitutional last year.
One notable difference from previous plans is the complete absence of VGTs. That might account for the difference in revenue between the House and the Senate.
Satellite casinos in; VGTs out
“We passed a (gaming) bill earlier in the year that had a significant amount of votes,” Corman said during the press conference.
“There will not be a VGT component to this proposal at all,” Corman said. “I know there was discussion of VGTs at truck stops, that will not be part of any bill that comes out of the Senate.
“The only really new component is ancillary facilities that could be opened up around the commonwealth.
“So we’re going to work through that to see what we get.”