Pennsylvania Punts on iGaming Until Fall Session; Passage Still Likely

For the second time in as many years, promising online gambling legislation in Pennsylvania has been put on hold, with lawmakers unable to agree on a budget plan and associated revenue package.

In May, the Senate passed an omnibus gambling expansion bill – which expands land-based offerings while legalizing and regulating iGaming options like casinos, poker rooms, and daily fantasy sports (DFS) – and the House approved the measure in June.

But with Pennsylvania mired in an ongoing $2 billion budget deficit crisis, Governor Tom Wolf declined to sign the bill until the legislature agreed on the funding portion of the state’s recently authorized $32 billion budget.

On July 27, the Senate finally authorized its preferred plan to close the budget gap. The proposal involves a combination of tax hikes, borrowing over $1 billion against a multistate tobacco industry settlement, and $200 million in licensing fees and other revenue generated by gambling expansion. Wolf has come out in favor of the plan, but the Republican-controlled House refused to even consider a solution predicated on tax hikes.

Thus, despite consensus agreement between the House and Senate on a gambling expansion bill, and a clear need to launch the iGaming industry immediately to begin generating revenue – lawmakers in Pennsylvania are once again locked in a stalemate.

Despite the budget funding debacle now extended until September 18 at the earliest, when the upcoming legislative session commences, gambling expansion is not expected to be lost in the proverbial shuffle.

Asked about the fate of iGaming in the Keystone State, Senate Democratic leader Jay Costa (D- Allegheny) told Legal US Poker Sites that the revenue package passed on to the House didn’t include gambling expansion:

“Our gaming conversations continue and were not passed as part of the budget revenue package that the Senate sent to the House for consideration.

We anticipate discussions around the issue to continue in the fall.”

John Pappas, who serves as executive director of the Poker Players Alliance (PPA) lobby group, observed that iGaming’s financial viability would ensure its survival into the next session:

“While there has been little to give us hope that a deal is imminent, most political observers agree that a budget funding package will get done this summer and that it will include iGaming.

It is the least controversial way to raise revenues without raising taxes, yet other highly-charged issues are sucking out the political good will to get a deal done.”

Adding to the pressure faced by hardline Republicans in the House, the state’s Auditor General Eugene DePasquale issued a forceful rebuke via an August 3 press release. In his statement, DePasquale made clear that Pennsylvania’s budget woes constituted a crisis, while urging members of the House:

“Today I added my signature to the $750 million line of credit that Treasurer Joe Torsella authorized from Treasury’s Short Term Investment Pool (STIP) to prevent the state’s general fund cash balance from hitting zero this month.

The fact the state is running out of money in the second month of the fiscal year should be a wake-up call to every elected official in Pennsylvania.

The House must do the responsible thing and come back next week to address this budget situation. And once they are back, the House and Senate leadership and the governor should immediately lock themselves in a room and work until they figure out a way to provide Pennsylvanians with a balanced budget.”

Further complicating matters, House Republicans are intent on including video gaming terminals (VGTs) in the gambling expansion package, allowing places like bars and airport terminals to offer real-money casino-style wagering.

This proposal has been a sticking point in Pennsylvania’s political realm over the last few years, and the Senate has essentially eliminated VGTs from its version of the bill.