Pennsylvania Folds on iGaming; Michigan Lawmaker Looks to Thanksgiving for Passage

After months of intense debate and political infighting, the Pennsylvania House of Representatives failed to reach consensus on funding the state’s $32 billion proposed budget – effectively ending the possibility of online gambling passage in the process.

The Senate passed a comprehensive iGaming regulation package in May, which was approved by the House one month later, but Pennsylvania’s ongoing $2.2 billion budget deficit crisis complicated the issue.

Governor Tom Wolf, a Democrat, had originally slated $100 million of the budget outline to be generated via iGaming licensing fees and annual taxes. When lawmakers finally approved a budget framework on June 30, that figure had been increased to $250 million from a newly created iGaming industry.

But the Republican-controlled House objected to minutiae within the iGaming bill, including tax rates and land-based gambling expansion, during a wider debate over funding for an already contentious budget.

Last week, Wolf appeared to end that debate by announcing his intention to bypass the legislature altogether. According to the Governor’s office, Wolf plans to borrow $1.2 billion from Pennsylvania’s state-operated liquor industry rather than wait for the House to act.

In a public statement, Wolf blamed party politics for the budget gridlock:

“Too many Republicans in the Legislature are more focused on the 2018 elections than on helping Pennsylvania succeed.

They’d rather see me fail than Pennsylvania succeed. They’d rather protect special interests, they’d rather protect lobbyists and campaign donors than do the right thing.

I’m not going to play their games anymore, so I’m drawing a line in the sand.”

As the Associated Press (AP) report detailing Wolf’s announcement mentions, this proposal doesn’t incorporate iGaming, or any form of gambling expansion for that matter:

“Wolf’s announcement seemed to mark an end to months of budget wrangling, along with massive casino-style gambling plans being floated in hopes of squeezing tens of millions of dollars more in casino license fees and gambling losses.”

Wolf stated that it would take two months to begin borrowing from the Pennsylvania Liquor Control Board (PLCB). This timeframe leaves a window for legislators to agree on a full budget package, one which would include the original iGaming regulations.

As excitement dims in Pennsylvania, a lawmaker in Michigan is drumming up optimism for his own iGaming bill.

State representative Brandt Iden (R-61) introduced House Bill 4926 in last month, which calls for legalization and regulation of online poker specifically, along with allowances for other casino games.

The House Regulatory Reform Committee – on which Iden serves as chair – held an informational hearing on September 13 to examine HB-4926.

This marks the first step in a lengthy legislative process, but as Iden told Online Poker Report this week, he’s hoping to pick up the pace considerably:

“Throughout the month of October, I’m hoping to gain a lot of headway.

If I had my way, we’ll be able to get everyone to the table and put a bill together and through the House before the Thanksgiving holiday.

We’ll see how achievable it is, but that’s my goal.”

Michigan has long been a prime candidate to become the fourth state with regulated iGaming.

With three commercial casinos in the Detroit metropolitan area joining 23 tribal gaming establishments across the state, a regulatory foundation for legal gambling is already in place.

But unlike in California, where a divide between tribal casino interests has routinely scuttled iGaming legislation, Iden told Online Poker Report his state’s stakeholders are on the same page:

“I really believe that the industry understands that things have got to move in this direction.

They’re constantly looking to expand their operations with new gamers. They realize they have generations of gamers that are going to be looking at new platforms, and if they don’t get on board they will miss the bus.

I’m telling them, ‘I have the desire to work with you to make this legislation right, but if you don’t come forward we’re going to proceed anyway.’

I think the message is starting to resonate. I’m not naïve. I do understand there are some hoops we’ll have to jump through so everyone believes it is equitable.”