Pennsylvania Gambling Expansion Encounters Similar Hurdles as California

Posted on: June 22, 2016, 02:27h. 

Last updated on: June 23, 2016, 01:17h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Pennsylvania gambling expansion measures are likely to be another topic of debate in the State House of Representatives this week in a dire effort to bridge a potential $1 billion to $2 billion budget deficit, but not everyone is on board.

As Casino.org has been reporting, State Representative and House Gaming Oversight Committee Chair John Payne (R-District 106) has been actively trying to persuade his colleagues to back a bill he authored that would extend gambling online.

The measure would also authorize off-track betting parlors at least 50 miles from a track to offer slot machines, and permit bars and taverns to house up to five video gaming terminals (VGTs) each.

The longtime Republican lawmaker from Dauphin County who plans to retire at the end of his seventh term on November 30 believes gambling expansion can help solve Pennsylvania’s revenue woes while not increasing taxes. He also believes it will better protect consumers already playing online, and provide new income to both off-track betting establishments and taverns.

The Pennsylvania General Assembly is set to adjourn for the 2016 legislature year on June 30, but that won’t be happening unless they can somehow whip together a budget in the next eight days.

The 2015-2016 financial plan was passed 267 days late. Although the lawmakers in Harrisburg are the stewards of the Keystone State, they’re not adhering to George Santayana’s famous quote, “Those who cannot remember the past are condemned to repeat it.”

The odds of the legislature passing a budget on time is about as likely as making money on that “Wheel of Fortune” slot machine.

California Nightmare

Payne’s hope to expand gambling to overcome Democratic Governor Tom Wolf’s wishes to increase spending on education is a sentiment shared by many in the legislature. Avoiding tax increases is a pillar of conservatism, but it’s also not a popular ideal in the Democratic Party.

However, plenty of opposition remains, and the environment is beginning to mimic another rather vital and big state in the Union: California.

The Golden State features a contentious mix between powerful Native American tribes and the horse racing industry. In Pennsylvania, it’s the powerful commercial casinos and the horse racing industry.

According to Penn Live, 11 of the state’s 12 casinos have come out against Payne’s gambling expansion in fear of VGTs cannibalizing the state’s gambling industry. Horsemen also largely side with the casinos, as they too worry VGTs in bars will detour bettors from coming to the state’s four remaining tracks.

State Rep. Mark Mustio (R-District 44) disagrees.

“Legalizing VGTs translates into $400 million in tax and fee revenue for the General Fund that is otherwise left on the table every year,” Mustio said at a press conference earlier this month. “Pennsylvania’s brick and mortar casinos are leaving too much of the market untapped.”

So About That $1 Billion…

Not that many politicians play it today, but the name of the game in lawmaking is compromise. The reality is that Pennsylvania is going to increase spending on public education per Wolf’s demands, and paired with the ongoing pension crisis, the legislature must find a way to fund the expenditures.

Sin taxes are typically the first to be increased when revenue is needed, but Payne wants Pennsylvanians to know nobody is forcing them to gamble.

“Nobody forces you to go to the casino, nobody forces you to gamble . . . Nobody forces you to drink. Nobody forces you to smoke,” Payne told a local ABC affiliate. “I don’t mind raising the money from those choices rather than mom and pop on a fixed income.”