At the start of 2015, there weren’t many strong candidates to pass an online gambling bill. With California seemingly unable to get out of its own way, the hope in the online gaming community was that Pennsylvania would emerge as a contender.
It didn’t take very long for the state to turn those hopes into a reality, as new Gaming Oversight Chairman John Payne and his Democrat cochairman Nick Kotick introduced an online gambling bill on February 26, 2015, touching off the most serious iGaming expansion efforts since New Jersey passed its online gaming bill in February of 2013.
The speed with which Pennsylvania jumped from “maybe” to “serious candidate” for online gambling expansion was impressive, considering the vacillating on the issue that occurred in 2013 and 2014.
Pennsylvania’s flirtation with online gambling dates back to 2013, when Representative Tina Davis introduced the state’s first online gambling expansion bill.
Davis’ bill was left for dead in the summer of 2013, as then House Gaming Oversight Chair Tina Pickett was quite skeptical of online gambling, and essentially placed a two-year moratorium on online gambling talk. At the time, Pickett told the Cleveland Plain-Dealer she didn’t expect any movement on online gambling until the end of the 2013/2014 legislative session, and there didn’t appear to be anyone in the legislature who wanted to press for online gaming.
Despite Pickett’s misgivings, the Pennsylvania Senate passed a resolution in December of 2013 to commission a study of the “current condition and future viability of gaming” in the state. While it was meant to be a comprehensive study, the resolution specifically called on whomever carried out the study to “analyze the potential impact of online gaming on the gaming industry, including the impact online gaming may have on the Commonwealth’s tax revenues and employment at the Commonwealth’s casinos.”
The study, which was conducted by Econsult Solutions, was presented to the legislature in early May of 2014. It indicated that not only would online gambling create the most revenue of any gaming reform option, but it would also be one of the most complimentary to the state’s brick and mortar casinos.
The study led to a halfhearted effort to attach an online poker (possibly online gambling) legalization bill introduced by State Senator Edwin Erickson in June to the state budget. However, the study set the stage for real progress in 2015, particularly when Pickett was replaced as the chair of the Gaming Oversight Committee.
In late February, new GO Committee chair John Payne introduced his online gambling bill, which lit the fuse for online gambling expansion talks in Pennsylvania and led to dozens of hearings and no fewer than five online gambling proposals.
At the time, Payne was a little-known lawmaker in online gaming circles, but he soon proved to be one of the industry’s greatest assets, and has rivaled New Jersey State Senator Raymond Lesniak as an iGaming champion.
In addition to Payne’s HB 649, there was:
Because it was a gaming reform omnibus, the Senate bill (SB 900) received some attention, but the proposal’s inflated tax rate of 54 percent pretty much stopped it in its tracks, and saw HB 649 replace it as the vehicle for online gaming expansion, as a slew of amendments were added to Payne’s bill. These amendments changed HB 649 from an online gambling bill to an omnibus gaming reform bill.
Unlike previous efforts in Pennsylvania and beyond, Payne’s efforts in 2015 brought about realized results, and the state seems poised to pass an online gambling bill in 2016. If the revenue wasn’t needed for the state’s pension program, it’s quite likely online gambling would have been used as a funding mechanism for the state’s yet-to-be-passed 2016 budget.
Despite being considered at several points, most recently as a Hail Mary way to solve the state’s budget impasse, Payne’s online gambling bill wasn’t passed in 2015.
Some saw this is as a failure and a setback for iGaming expansion, but as Payne himself explained, it was designed to solve one specific problem, and that problem will be dealt with in early 2016.
As Payne told Online Poker Report:
“I was never given instructions by the leadership to hurry up and get this done so we would have it for June’s budget. We always planned on using any revenue from gaming for the structural deficit in our pension; that’s still the plan.”
According to Payne, this will happen in the spring of 2016. “We’re back to the original plan,” Payne said. And according to Payne that plan is to “take gaming away from the budget process and put it on the shelf, and use it [as it] was originally intended for next spring.”