A strong op-ed out of Pennsylvania today signals positive momentum for regulation, as two key members of the Gaming Oversight Committee in the House called for the state to pass an online gambling bill.
The piece, posted on PennLive.com, is signed by Rep. John Payne and Rep. Nick Kotik.
In an interesting narrative tactic (one that could quickly become a trope in the Mid-Atlantic if successful), Payne and Kotik frame the issue as analogous to Pennsylvania’s decision to authorize land-based casinos:
When Pennsylvania approved casino-style gambling in 2004, the state took advantage of a known, available revenue stream that was being lost to outside entities.
At the time, Pennsylvanians were crossing state lines for New Jersey casinos, and hundreds of millions of dollars in potential taxes and revenue were lost each year.
Something similar can be said about online gaming: it’s happening here in our state, but because it is not regulated Pennsylvania loses out on millions of dollars in tax revenue that instead goes into the pockets of offshore illegal gambling websites.
The op-ed leans heavily on recent polling commissioned by Caesars that shows broad support for regulation – assuming critical consumer protection measures are part of the process.
Economic upside, bi-partisan support and the belief that an online product helps to support the land-based product (a view recently hammered home by Penn National) are other points stressed by Payne and Kotik.
“It makes no sense to leave online gaming unregulated, and sit idly while the state loses out on this income and players are unprotected,” the two conclude.
Payne and Kotik are co-sponsors of HB649, broadly considered to be the primary legislative tool for achieving regulation in Pennsylvania.
Other details of the bill:
While Pennsylvania’s casino operators are less divided that, say, California’s, there’s far from universal consensus on the issue of regulation.
Obviously, Sheldon Adelson’s Sands Bethlehem opposes regulation. And while the remainder of casinos have generally signaled support for regulation, a number of issues are still capable of fostering division:
It’s also important to remember that online could easily become something of a bargaining chip in the larger negotiations over concessions on the land-based side that the casino industry is seeking from lawmakers.
Payne’s bill comes as Pennsylvania lawmakers approach the annual challenge of making the state’s budgetary numbers conform to fiscal reality.
While online gambling wouldn’t produce any revenue – at least not any material revenue – from operations in the year to come, lawmakers could find a viable revenue well to draw from in upfront license fees.
Such fees could net the state upwards of $50mm, although some (if not all) of that amount would effectively be a prepayment on taxes due in future years.
Steve Ruddock offered a lengthier take on how the process could come together in a recent article here.