Pennsylvania Republican, Democrat Agree: Regulating Online Gaming Is A Win / Win

Dustin Gouker June 1, 2015 1221 Reads

Two key Pennsylvania politicians — Reps. John Payne and Nick Kotik — wrote an op-ed presenting the case for legalizing and regulating online gambling and poker in the state.

Payne and Kotik are co-sponsors of one of several active bills in Pennsylvania that would deal with iGaming; Payne chairs the House Consumer Affairs Committee, and Kotik is the committee’s ranking Democrat. (Full text of bill is available heretracking for HB649 can be found here.) Their bill is the most likely to move forward.

Titled “Here’s why Pa. needs to legalize online gambling”, the opinion piece appeared at PennLive.com, the online presence for The Patriot-News based in the state capital in Harrisburg.

The crux of their argument?

“It makes no sense to leave online gaming unregulated, and sit idly while the state loses out on this income and players are unprotected.”

The article hits on a lot of talking points touted by online gaming and poker proponents: Here’s a closer look at what they wrote:

PA is losing revenue

Payne and Kotik describe their push to legalize iGaming to the state’s decision to allow brick-and-mortar casinos back in 2004. Then, the state was losing gaming revenue to New Jersey, when it could simply offer casinos itself.

Now:

“Something similar can be said about online gaming: it’s happening here in our state, but because it is not regulated Pennsylvania loses out on millions of dollars in tax revenue that instead goes into the pockets of offshore illegal gambling websites.”

Right now the fact that potential revenue isn’t flowing into state coffers is a key point in Pennsylvania, like it is many states. PA is facing a budget deficit of $2 billion, and adding iGaming is a relatively easy way to make money.

And, as Online Poker Report notes, online gaming could be part of a compromise between Democrats and Republicans in dealing with the budget shortfall.

Here’s a look at online gaming revenue projections for Pennsylvania. The op-ed says iGaming would create “$120 million for Pennsylvania in its first year.”

Regulation is the way to go

This is a common refrain, and one that is absolutely true:

“And what’s more, because these online games are unlicensed and unregulated, players are exposed to financial risks and abuse. There also are no protections to stop children and other underage players from gaining access, and no protections for problem gamblers.”

A prohibition on online gaming and poker isn’t really stopping anyone who wants to play. But creating a safe, regulated environment has been working in the United States. Which leads to…

It’s working elsewhere

The authors note the presence of online gaming in Nevada, Delaware and New Jersey:

“These states have shown that the technology exists to provide safeguards. This type of gambling is only growing.

Figures released from New Jersey this month show that online gaming revenues have increased 19 percent compared to the first four months last year.”

If these states can make it work, clearly Pennsylvania should be able to too, the argument goes.

Pennsylvanians are in favor of it

If you believe a poll that just came out on the subject of online gaming in PA, it has a healthy majority behind it:

“A just-released poll of Pennsylvanians commissioned by Caesars Entertainment shows 58 percent of respondents believe online gaming should be strictly regulated which is at the heart of our legislation.

Nearly 66 percent believe online gaming revenue should be taxed and the proceeds used for vital state programs (only 20 percent disagree).”

Of course, that poll was bankrolled by Caesars, which is pro-online gaming. An opposing poll — funded by Sheldon Adelson’s Coalition to Stop Internet Gamblingcame to the opposite conclusion.

It seems the truth might be somewhere in the middle, although we would wager on CISG’s numbers being more cooked than the newer poll.

Casinos are in favor of it

While there is sometimes pushback from land-based establishments about iGaming, casinos seem to mostly be on board in Pennsylvania:

“Regulating online gaming also helps existing casinos (and the jobs they provide), which means property tax relief for Pennsylvanians. … In fact, Penn National Gaming officials have testified at legislative hearings that they believe Internet gaming is vital to evolving and protecting their business — so much so that the company named a Head of Online Gaming.”

Penn National has come out strongly in favor of online gaming. A few casinos have signed deals with online partners already, well in advance of passage of a bill.

So what’s next?

The bill, so far, has only been introduced in the legislature and referred to the Gaming Oversight Committee. That happened back in February. It’s currently not on the schedule to be heard in committee, let alone get an up-or-down vote to move it forward.

Whatever happens next, it needs to happen by June 30, when the budget is due. The iGaming bill could be on the table up until the bitter end.

Clearly, the proponents of the bill are stating their case in order to build support and a consensus on how iGaming can move forward. We likely won’t know how successful they’ve been for another month.

Photo by Ruhrfisch used under license CC BY-SA 4.0.

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