Pennsylvania Online Gambling Bill Dealt Political Setback

A Pennsylvania legislator who oversees a powerful state committee on gambling doesn’t think the time is right for an online gambling bill in Pennsylvania.

Rep. Tina Pickett – the chair of the Gaming Oversight Committee in the Pennsylvania House – told reporters that she was worried about “bringing gambling to everyone’s kitchen table” and that she preferred to take a wait-and-see approach to online gambling.

Pickett’s committee is an unavoidable step for Rep. Tina Davis’ bill seeking to regulate online gambling.

Pickett went on to tell reporters that she doesn’t think Davis’ bill would be moving through her committee anytime during the ongoing session that runs through 2014. If that’s really her firm position, then residents of Pennsylvania will have to wait until 2015 – at the earliest – before seeing any movement on online gambling legislation.

Many critics of bill’s structure

Davis’ bill to regulate online gambling in the Keystone State found few friends among players and the industry at large. The primary complaint was the proposed tax rate, which far exceeded any tax rate proposed in U.S. online gambling legislation to date.

While the tax rate of over 20% was more a reflection of Pennsylvania’s sky-high tax rates for land-based gambling, it still drew fire – especially from players who believed online poker would not be a sustainable enterprise under the proposed tax rate in Davis’ bill.

Bill faced challenges from start

While Pickett’s decision has certainly killed any momentum that Davis’ bill might have had, the fact of that matter is that Pickett is far from the only problem facing the bill.

Davis attempted to introduce her bill multiple times during the early days of 2013, but introduction was delayed time and time again. When the bill finally was brought forward, the criticism detailed above was matched by many in Pennsylvania government, especially the GOP-controlled House.

In short, even if Pickett had decided not to throw up a roadblock with her committee, the outlook for the online gambling bill in Pennsylvania would still have been incredibly negative.

New Jersey critical to future of PA online gambling

Pickett’s comments regarding online gambling in New Jersey to The Plain Dealer are especially interesting. Pickett was careful to note that she’d be willing to consider the issue of online gambling in her state if it appeared that online gambling in New Jersey was cutting into the bottom line of Pennsylvania casinos.

Growth for PA casinos has been remarkably strong in recent years and analysts are divided on the impact that online gambling might have on land-based revenue.

It will also be interesting to see how PA identifies the specific impact of online gambling on land-based casino earnings; for example, how do you tell what part of a drop might be due to online gambling and what part of a drop could be due to casinos in neighboring states like Ohio?

Does Pennsylvania delay indicate larger problems for U.S. regulated online gambling?

In some ways, yes. Pennsylvania’s current situation serves as a clear reminder that if online gambling faces an uphill legislative battle in states where a bill has been introduced and regulated gambling is already widespread, then the battle will be tougher still in states where less of a natural base of support for gambling exists.

But in the specific sense, this setback will have little impact on the state of regulated online gambling in the United States at large, as Pennsylvania’s online gambling bill was widely considered to be dead in the water long before Pickett came out publicly against the bill.