Pennsylvania Online Gaming Chances Crumble
The latest news from Pennsylvania regarding the chances for online poker legislation in 2017 is not good. Just days after reports indicated that budget talks were progressing and included online gaming, the legislature’s discussions fell apart with no clear answer in sight to overcome the budget deficit.
Throughout the past few weeks, the House and Senate had been debating alternative solutions for the budget crisis in order to find a way to pay for the $2.2 billion deficit. From increased taxes to gambling expansion, most things remained on the table in an effort to appease everyone and find the necessary votes to pass a plan that would also be acceptable to Governor Tom Wolf.
Even the most contentious part of the gambling expansion bill, the video gaming terminals (VGTs), was finding middle ground in the debate, with a limited introduction of the machines proposed on a trial basis instead of full-blown legalization. And the initial licensing fees from online gambling, as well as ongoing revenue in coming years, was the main reason that the gambling expansion bill was important to the budget talks.
The breakdown of the talks, however, puts everything at risk. The gambling expansion bill no longer appears to be a priority, and without the need for it to help the budget deficit, it is likely to be shelved until next year, at which point all of its components will be introduced, debated, examined, and brought for a vote yet again.
While there is still a chance of the gambling bill, including online poker and casino games, passing this year, the likelihood shrinks by each passing day.
The past few weeks consisted primarily of behind-the-scenes talks and summaries given to the media. The Pennsylvania State House and Senate continued to reject most of each other’s proposals, but progress had been made on some fronts. One of those fronts was gambling.
Gambling Compliance Research Director Chris Krafcik was the source of some important information regarding that bill. Per his Twitter feed on September 28, he wrote, “Multiple sources say majority Senate GOP caucus working on gambling expansion plan that includes limited roll-out of VGTs.” He went on to say the VGTs would be limited to truck stops only at first. It was unclear if the Senate had enough votes to pass the plan, but the efforts continued. And online gambling remained a key part of that proposal.
On October 4, Krafcik returned to Twitter with updates. The gambling package was still on the table with the truck-stop VGTs included. Online poker and casino operators would be charged $10+ million license fees each, with a 20% tax on poker and 26% tax on casino games.
1/ #iGaming—PA casinos to operate; iPoker, iCasino allowed; $10m+ license fee; 20% tax on iPoker; 26% tax on iCasino; no limit on skins.
— Chris Krafcik (@CKrafcik) October 4, 2017
Yet So Far
Later in the day on October 4, the bad news came.
— Dustin Gouker (@DustinGouker) October 4, 2017
Heated discussions took over as the day wore on, and votes were futile. Wolf then stepped in and insisted the time for playing games was over. He announced he would try to raise more than $1 billion by securitizing profits of the state liquor system. “I’m going to do it myself,” he said.
House Minority Leader Frank Dermody told reporters, “I don’t know where we are right now.”
With that, members of the legislature went to their respective homes, leaving Wolf to work with the Liquor Control Board on his plan. The legislators are not expected to return to Harrisburg until the middle of October to talk again, though no meetings are officially scheduled.
Meanwhile, Pennsylvania’s finances remain in shambles with no balanced budget and not enough money to pay current bills. Wolf claimed to be able to handle it and has been since the money stopped flowing on September 1. The legislature is now more than three months into discussions about how to fund the budget they passed in the summer, which requires $32 billion to operate but is missing more than $2 billion of it on the books.
Talks may have crumbled, but they will resume after a break. Legislators know the urgency of the situation and face the current ire of their governor for not finding a compromise yet. Tension keeps increasing while possible solutions disappear.
Gambling, however, remains as a possible solution. It is not off the table. The problem is that the legislators may decide to come to the easiest compromise available when they return to work in two weeks, and there is certainly no guarantee that online gambling will be a part of it.
We wait. Again.
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