Pennsylvania is facing some tough times right now. With a looming government shutdown coming due to a failure to finalize the 2016 budget, online gambling has finally made it back onto the table. This past Wednesday, the House defeated a 2.4 billion dollar tax raise that was put forward by Gov. Tom Wolf. Dave Reed, House Majority Leader, believes that “we need to have a discussion first on what other revenues are on the table.” Reed has always had gambling expansion on his list of priorities and now seems like the perfect time to look at further online gaming options.
The state of Pennsylvania has already made two major moves towards gambling expansion in the past six years by allowing slot-machine gambling and gambling in bars. Both have had varying stages of success, proving that relying on gambling as a source of state income can be unpredictable. For example, in 2013, gambling in bars was legalized, and lawmakers estimated it to bring in an additional $150 million to the yearly state budget. By the end of the year, the bar slot machines had generated a meager $554,000. This hardly even registered out of the total $30.6 billion income that the state made off of taxes that year.
However, if we use New Jersey as an example, it is clear that there is money to be made for the state off of legalizing gambling. It may simply be that the majority of players prefer to gamble online rather than go to a bar. If an online gambling bill were to be passed in Pennsylvania, supporters believe that with the right tax rates, it could be a major boost to the economy. Mike Bean, president of the Mohegan Sun Pocono Casino, says, “that New Jersey is a good model.” New Jersey currently requires a 15% tax rate to be paid on all online gambling.
A bill has been proposed by Sen. Kim Ward, which would allow casinos to buy online gambling rights. If the bill gets passed, a one-time fee of $10 million would be required from each casino that would like to offer internet gambling to their customers. Although the immediate revenue that would be generated from this will likely be low, over time as more casinos begin to grow their online gambling, the state will continue benefiting with ever higher yearly tax revenues. Tax collection on table games, which was legalized in 2010, brought in $96 million last year.
It is still tough to tell whether or not this bill will have a chance at passing, though. Many, such as Senate Minority Leader Jay Costa, are still against it. Costa is “firmly against balancing the budget on the backs of gambling addicts.” This can be a highly unpredictable source of income and it does not help the public in the long run. Instead, it attempts to solve one problem by creating another.
Ultimately, only time will tell whether or not some form of online gambling becomes legalized for Pennsylvania. However, with the current standstill on an agreement for the new budget reaching nearly 100 days, this could be the best chance that an online gambling bill is likely to have in the foreseeable future.