The Pennsylvania legislature is back in session, and gambling is back on the table.
The current environment for online gambling
Even though two hearings that were expected to discuss online gambling expansion were cancelled (the first on October 21, and the second on October 27), the issue is still very much in play, per the Chairman of the Pennsylvania House Gaming Oversight Committee, John Payne.
I reached out to Chairman Payne following the cancellation of the second hearing and his office stated, “The cancellation of today’s hearing has no effect on online gambling,” adding, “A vote [on online gambling] is still being anticipated.”
According to a recent column in Gambling Compliance, House Democrats and Republicans have been discussing which gaming proposals should be included in a larger reform package. “There’s no desire to run nine bills out of committee,” Payne told GC. “My role as chairman is to put the package of bills together, make sure that the revenue numbers are realistic, and get the votes to make sure that it gets out of the committee.”
These statements echo comments Payne made to me back in March:
“My mission statement is to keep gaming in general healthy, but in particular to make sure our casinos stay healthy and competitive against our surrounding states… My job is to introduce legislation in the Gaming Committee that we can present to our leadership team in May and say ‘If we’re serious about this, and we do Internet gaming it would generate this much revenue; fantasy sports this much; fix the small games bill it would do this much; something in private clubs it would do this much.’”
Pennsylvania looking at a lot more than online gambling
Over the course of 2015 there have been multiple gaming reforms proposed, but the common theme amongst these proposals has always been that a gaming reform package would start with online gambling, which is not only the biggest potential revenue generator of the bunch, but also the measure with the largest consensus.
In addition to online gaming, the legislature has discussed:
- Online lottery sales
- Reforms to the state’s “Tavern Gaming” bill
- Adding games of skill
- Requiring DFS operators to partner with existing land-based casinos
- Adding slot machines to airports
- Adding slot machines to off-track betting parlors
- Removing membership requirements for Category 3 “Resort” casinos in the state
- Increasing the number of hours casinos can serve alcohol
It will be interesting to see which proposals the Gaming Oversight Committee recommends in addition to online gambling, and it doesn’t seem Chairman Payne is ruling any of these proposals out.
“Anything is possible for recommendation as being part of the 2016 budget deal,” Payne’s office told me.
iGaming tax rate a potential sticking point
In addition to which proposals they will recommend, the legislature will also have to come to an agreement on an Internet gambling tax rate, as Chairman Payne’s bill (HB 649) proposes a 14% tax on gross gaming revenue, while Senator Kim Ward’s bill (SB 900) proposed a 54% tax rate on gross gaming revenue.
There appears to be only a couple of holdouts for this higher, untenable, tax rate.
Payne comes under fire, but undeterred
As the person leading the charge for online gambling expansion, Payne has found himself the target of attack ads by the Coalition to Stop Internet Gambling, Sheldon Adelson’s anti-online gambling lobbying group. However, the attack ads (which imply Payne is putting children and senior citizens at risk of “predatory” gambling) haven’t had the desired effect.
“As of last Friday, 68 percent of phone calls into my office [have been] for iGaming, so if the intent of the ads was to deter or change my opinion they have done the opposite,” Payne told Gambling Compliance.