Pennsylvania Finally Passes Budget but iGaming Package Stalls Amidst Legislative Stalemate

Despite having passed the spending portion of a long-awaited $32 billion budget two weeks ago, lawmakers in Pennsylvania remain locked in a stalemate with Governor Tom Wolf over the issue of funding.

And one casualty of that legislative gridlock is the Keystone State’s comprehensive gambling expansion package, which includes legalization and regulation of online poker, casino games, and daily fantasy sports (DFS).

The omnibus gambling expansion bill was passed by the Senate in May, with the House providing its own approval in June, but despite achieving widespread support in both votes, it hasn’t yet become the law of the land. With the Governor’s office and the Legislature unable to find agreement on the terms of a funding package for the massive budget, the House’s estimate of $250 million to $300 million in additional annual revenue from iGaming alone has long been considered a crucial piece to the puzzle.

Per reporting from Philly.com, Pennsylvania is currently faced with a $1.5 billion deficit from the previous fiscal year – along with a projected shortfall of $700 million for the current fiscal year which began on July 1.

House Majority Leader Dave Reed (R-Indiana) spoke with Philly.com on July 11, the same day lawmakers adjourned the current session without yet finalizing a funding package:

“It’s got to get done… it will get done.

You know, sometimes a couple of hours away for everybody is a good thing. We can regroup and put it back together.

I don’t think anybody wants to do this all year.”

Reed’s optimism was based on the fact that the Legislature put members of both the House and Senate “on call,” meaning they must be prepared to return from recess for an emergency session on six hours’ notice.

That provision left members of the Legislature – and iGaming observers nationwide who hope to see Pennsylvania become the fourth state to regulate the industry – hopeful that a deal would be struck this week.

But as of Friday afternoon, with the weekend looming, only the Senate has remained in session – and that body has yet to take up the contentious gambling expansion issue for a second time.

One hurdle that had held up the iGaming debate for years in Pennsylvania concerned so-called video gaming terminals (VGTs) – or slot machine style devices that use video screens to recreate chance-based gambling games.

The initial plan to allow restaurants, bars, and other non-casino establishments to offer VGTs sparked fierce debate within the Legislature, with the House insistent that they be included to provide a steady stream of gambling revenue while the iGaming industry gets off the ground.

Per a report published by PennLive, however, leadership in the Senate moved to kill off the VGT proposal on July 8, with Senate Appropriations Chairman Pat Browne (R-Lehigh County) offering a brisk dismissal:

“That is no longer part of the conversation here.”

Predictably, the VGT issue has resurfaced during the recent debate, and members of the House are currently said to be pushing for them to be added back into the bill.

Back on June 26, state senator Tom McGarrigle (R-Delaware County) explained his reservations over VGTs to PennLive, pointing to their potential to drain income from established land-based casinos like Harrah’s Chester:

“My concern is we’re trying to come up with gaming legislation in the five days before the budget’s due, and I just don’t think that trying to ram it down in the last five days is good …

When you look at a business that generates almost a third of (the city of) Chester’s budget, that’s a lot to jeopardize. I just need a lot more time than a week or two weeks to make a decision like that.”

It’s been over two weeks since that quote was given, and the Pennsylvania Legislature remains unable to forge compromise on VGTs – leaving the widely supported issue of iGaming hanging in the balance.