Pennsylvania Lawmakers Begin Discussions on Legalizing Online Gambling

Last updated on November 2nd, 2018

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The Pennsylvania legislature is preparing to give legalized online gambling a serious look in 2015. Pennsylvania has had a complex history with gambling, while online gaming legislation went down to defeat as late as 2013. Still, the state is facing a budget crisis and gambling is often seen as an easier sell than higher taxes or a reduction in services.

This second online gaming bill has two major differences than the early bill which failed to gain support.

No Online Casinos Allowed

One, the latest bill clearly defines that poker is the online game that will be allowed online. Online casinos will not be allowed to operate in Pennsylvania, which is going to greatly reduce the revenues the state can collect from the Internet.

In other jurisdictions, online poker rooms have lagged behind the casino sites significantly, because they did not have enough players and liquidity to make the games attractive. Pennsylvania is a bigger state, so their lawmakers are assuming the population will be able to support a world-class iPoker experience.

Contains a Bad Actor Clause – No PokerStars

Two, the legislation contains a bad actor clause. A “bad actor” bans any company which accepted US players after the UIGEA went into effect in 2007. This bans PokerStars from participating in the Pennsylvania online poker industry. While these measures are decisive, the exclusion of PokerStars is one more limiting factor in the bill.

Tom Wolf Is against Online Gambling

Governor Tom Wolf could prove to be a stumbling block, but advocates of online gambling do not see him as a certain obstacle. While the current governor of the state is not a proponent of online gambling, he has promised to increase funding for public education and one painless way to do so without raising taxes is to license online casinos.

Pennsylvania has turned to brick-and-mortar gambling time and again when it needed more revenues. In 2004, the state’s leaders approved casino-style gambling at racetracks across the state. That began a program of expansion which continues to this day. Eventually, land-based casinos like the Sands Bethlehem were approved.

Land-Based Gaming Industry

By 2010, Pennsylvania had 13 casino operations on its soil. This expansion hurt Atlantic City, as Pennsylvanians, New Yorkers, and even some North Jersey residents preferred to go to the Philadelphia-area casinos than the Boardwalk.

In 2015, Pennsylvania is now the second-leading state in gaming revenues, behind only Nevada. That is remarkable, given the fact California has such a large casino gambling industry (though tribal casino revenues are not considered). The continual expansion of casino gambling in many ways has continued to make gambling normalized in the minds of the state’s residents, who seem to want more gambling.

Tina Davis Bill Defeated

Despite the land-based trends, the drive towards online gambling has been rebuffed in the state. In 2013, State Rep. Tina Davis penned House Bill 1235 to the Pennsylvania state legislature. Though Rep. Davis’s bill got lawmakers and citizens discussing the issue, HB 1235 never got any serious traction in the legislature. Only 11 representatives signed on to the bill.

Two years later, the environment might have changed. The budget concerns are greater. New leaders are in office. Online gambling is continuing apace in nearby New Jersey and Delaware, showing the possibilities. And the brick-and-mortar gaming industries are gaining more acceptance with the population.

In such an environment, it is hard for residents to reject one form of gambling, while embracing another. While some people try to make a distinction between online and offline gambling, most people do not seem to buy the argument.

The Governor Might Support It, Anyway

Several who claim to know Governor Tom Wolf, who just took office on January 20 of this year, say he is likely to see online gambling as an opportunity, if the measure is put before him. While the new governor has said he would find additional revenues by imposing higher income taxes on Pennsylvania’s well-to-do residents, it is though that the state will need additional sources of revenue to meet Wolf’s public education funding quota.

The fact Tom Wolf is a Democrat helps matters greatly. Land-based gaming executive and GOP donor Sheldon Adelson is seen as the single-biggest opponent of online gambling in the United States, because the billionaire president of the Las Vegas Sands Corp has sworn to spend whatever it takes to see online gambling banned in all 50 states. To that end, he has found Republican lawmakers to support his anti-online gambling legislation in the United States Congress. Sen. Lindsey Graham and Rep. Jason Chaffetz do the lion’s share of the world in both houses of Congress.

Las Vegas Sands’ Influence on the Outcome

Since the Las Vegas Sands Corp has a large presence in the state of Pennsylvania (The Sands Bethlehem), Adelson is better prepared to wield influence in Pennsylvania than most states outside Nevada. If a Republican governor were sitting, it might make it hard for that GOP executive to resist Adelson’s influence.

For a Democrat used to operating without Adelson’s fiat, the decision to sign a bill so dead-set against the gaming executive’s pet project would be easier.