Online gambling amendments remain on the table, though Pennsylvania lawmakers could go in several directions.
Pennsylvania could have legal online gambling soon. The Pennsylvania House of Representatives passed House Bill 453 on Wednesday night, which includes revenues from “gambling expansion”.
H453 now heads to the Pennsyvlania Senate. The House and Senate each have passed competing budget bills throughout the summer, but today is a deadline for the two sides to reach an agreement.
Pennsylvania Spending Freeze Imminent
Starting on September 15, Pennsylvania’s main bank account will run out of funds, requiring Governor Tom Wolf (D) to cut spending on key programs, including mass transit, infrastructure, and school programs.
While nothing is certain, the spending freeze should force some manner of resolution between the two sides. One scenario has House Speaker Mike Turzai (R) and Senate Majority Leader Jake Corman (R) agreeing to a temporary fix by passing a temporary budget bill through the end of the year. That has been the case the past two years, when Pennsylvania did not pass a formal budget with recurring revenues.
State’s Credit Rating Downgraded?
That might not work this year. Gov. Wolf said he expects Standard & Poor to downgrade Pennsylvania’s credit rating on Monday, if no budget is passed by then. A lower credit rating would make borrowing money harder and more expensive for the State of Pennsylvania, which faces a $2.2 billion budget deficit at present. At some point, politicians have to believe they will pay a political cost, if they continue to mismanage the public funds.
Friday nor Monday might not be the drop-dead dates some expect. State Treasurer Joe Torsella could allow the state government to dip into the General Fund to run for several more days, if both sides appear to be negotiating in good faith. Eventually, though, a deal has to be struck.
H 453’s Expanded Gambling Clauses
As it is, the expanded gambling clauses in House Bill 453 are vague. No specific details were given, as both sides viewed the bill as an opening salvo in negotiations. Over the last few months, the House and Senate each have proposed a number of gambling amendments, including an omnibus gambling bill. From those proposals, we can make a few guesses about what the House Bill includes.
Almost all gambling packages either side proposed over the course of the summer included online poker, online casinos, and daily fantasy sites. If gambling expansion is passed, it looks like online poker and DFS would be legalized, while online casinos are almost as likely to be passed.
Does Bill Include Pennsyvlania Online Gambling?
From there, things get sketchier. House Speaker Mike Turzai wants to legalize video gambling terminals, which would place about 40,000 VGTs in taverns and restaurants throughout Pennsylvania. This is anathema to the brick-and-mortar casino industry in the state, so a powerful lobbying coalition seeks to influence lawmakers against VGTs.
The Senate preferred several other options, including (slots-style) tablet computer betting in international airport terminals or even satellite casinos for the existing license holders in the state. Given that a consensus has not formed around most of these gaming types, the likeliest option for expanded gambling is online gambling bill.
Pennsylvania Online Poker: Bad Actor Debate
Earlier this year, online gambling legislation was stalled over the “bad actor” debate. Such questions inevitably involve whether PokerStars will be included in Pennsylvania online gambling, or whether the world’s largest poker site will be banned. While the bad actor clauses do not dominate the conversation the way it does in California’s online poker debate, it is a potential stumbling block in any Pennsylvania online poker legislation.
The betting man would wager on the passage of online gambling legalization in the upcoming Pennsylvania budget bill. Then again, the betting man would have lost a lot of money wagering on state governments to pass online poker in the last 4 years. Since 2013, California, Pennsylvania, Illinois, Michigan, and several other states have failed repeatedly to pass online gambling legislation, despite many oaths and promises. It is a sign of the times that laws seldom get passed.
VGT Hearings in the Senate Law Committee
If nothing is passed by September 19, Pennsylvania’s online gambling enthusiasts will set their eyes on Senate Law and Justice Committee. Senator Chuck McIlhinney, the Chairman of the Law and Justice Committee, called a hearing on gambling expansion in the state.
Sen. McIlhenney plans to explore several topics. The VGT legislation is on the top of the agenda, because the chairman wants to hear about allegations of organized crime in the illegal VGT industry in Pennsylvania. Chuck McIlhinney’s statement announcing the hearing sounded facetious, because he challenged those House Republicans who support regulated video lottery terminals to back up their claims about the illegal VGT legislation.
Whatever else might happen at the hearings, observers of the long and complicated Pennsylvania gaming law negotiations should get some insight into what H453 includes.
