Push For Changes To Pennsylvania Gambling Law Comes At Crucial Point For State

February 20, 2017
Push For Changes To Pennsylvania Gambling Law Comes At Crucial Point For State

The stakes for Pennsylvania when it comes to potential changes to gambling law in the state couldn’t be higher. And the issues being pondered aren’t minor.

The state faces a major budget deficit, with gambling being counted on to bridge the gap in revenue. The state’s casinos are dealing with increasing regional competition. Revenue for PA casinos is in the midst of a downward trend.

Lawmakers are eyeing the legalization of online gambling. They’re trying to fix an unconstitutional tax on casinos benefiting host jurisdictions. And they are looking at an expansion of the availability of slot machines video gaming terminals around the state. All of these issues are likely to be handled via a single omnibus gaming bill.

It all adds up to a lot of moving parts. It also means the path toward legal online gambling is not going to be a straight path from point A to point B. Here’s a look at some of the recent developments in the state on the topic of gambling.

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Legislature tries to get on same page on gaming issues

The House and Senate are trying to schedule a joint hearing regarding gaming issues. This could go along way toward smoothing the way for the gambling bill.

The two chambers have not seen eye-to-eye on gaming issues in the recent past. While the House twice passed major gaming bills in 2016, the Senate took no action on gaming other than passing a bill regarding the aforementioned casino host tax.

It does not appear online gambling — or any gaming measure, for that matter — is going to be considered as a standalone issue. So consensus needs to come on a variety of issues.

Still no consensus on casino host tax

One of those issues? The casino host tax that was struck down as unconstitutional by the state Supreme Court.

There are competing plans on how to tax casinos and then funnel those funds to the jurisdictions. One plan has the state issuing a tax credit for small casinos who would have to pay a disproportionately large percentage of their revenues to their jurisdictions.

Some casinos and host municipalities have already come to agreements on payments continuing even if the legislature doesn’t act. But some have not, which will likely spur action this spring. (The court told the state it had until late May to pass a fix.)

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Slot slump continues in PA

The revenue generated by Pennsylvania’s land-based casinos continues to be a cause for concern.

Slot revenue has declined, year over year, for four straight months. At this point, it seems the ship isn’t going to right itself on the slot revenue front.

That makes whatever decisions the state makes for the gaming industry now crucial for its future moving forward. Things like online gambling could help the bottom line for casinos, while the possibility of video gaming terminals threaten to cannibalize existing revenue.

It’s just one more issue that complicates the overall gaming picture in Pennsylvania.

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