Inclusion In Budget Does Not Make Online Gambling Legal In Pennsylvania

Online Gambling Legalization Hardly A Foregone Conclusion In Pennsylvania

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Pennsylvania is inching closer to passing an online gambling bill, but the path has been torturous for proponents of legal, regulated online gambling.

A year and a half of painstaking work by Representative John Payne, which included dozens of hearings, the amalgamation of multiple bills, and a slew of proposed amendments, culminated in the Pennsylvania House of Representatives passing an omnibus gaming reform bill.

HB 2150 includes the legalization of online gambling with the revenue generated being used to help fund the state budget. Unfortunately, the Senate never acted on the bill, instead adopting the revenue projections from the House bill as part of the budget it passed.

Ultimately, the revenue from online gambling and the other gaming reforms will be counted on as part of the state budget, before the state actually legalizes online gambling.

So, if online gambling is in the budget, and the budget has been agreed upon and approved, doesn’t that make online gambling legal in Pennsylvania?

The answer to that question is “no.”

How a bill becomes a law… in Pennsylvania

The Pennsylvania legislature does things a bit differently than most other states, or the federal government for that matter.

In Pennsylvania the different elements that fund the state budget must pass on their own accord. When it comes to the budget, the legislature can earmark revenue from a bill that has yet to pass, but the bill itself doesn’t become law because of this relationship.

Essentially, the legislature can include online gambling in its funding calculations for the state budget, but until a bill legalizing online gambling is passed, online gambling isn’t legal in Pennsylvania.

This is unlike Congress, where amendments are routinely added to larger spending and funding bills in order to get them passed.

If the online gambling bill (or some new form of it) isn’t passed down the road, the revenue these measures are expected to bring in will simply be stricken from the budget, and the programs and departments they were supposed to fund must find an alternative funding source.

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Online gambling passage seems inevitable

This same scenario, the legislature adding online gambling to the budget before a bill was passed, was a possibility in 2015 when online gambling was being kicked around as a way to end what turned out to be a very protracted budget stalemate. That stalemate lasted roughly 10 months.

As I noted in a column in December, this type of budgetary placeholder means passage of the bill is highly probable:

“Alternatively, revenue from online gambling could be included in the 2016 budget as a funding source, without an online gambling bill being passed. This would require the legislature to prioritize the legislation and pass an iGaming expansion bill early next year. This placeholder path (for lack of a better term) would all but insure online gambling would be legalized in early 2016, and for all intents and purposes, online gambling would be legalized with the passage of the budget. “

With no other way to raise the revenue the gaming reform bill would create, and with online gambling already cooked into the budget, it’s more probable than not that Pennsylvanians will be playing online poker and online casino games by the end of 2017.

A lot can happen between now and then

While it seems like a foregone conclusion that online gambling will be legalized in Pennsylvania, let me also offer up a warning: Don’t count your chickens before they hatch.

The legislature has recessed until September. With passage of the bill still several months off, the rug could still be pulled out from underneath online gaming supporters.

A myriad of situations could upend the process and lead to the death of online gambling:

  • There is always the chance that another revenue solution presents itself. One such proposal is increasing the tax on table games at land-based casinos by two percent.
  • The politically powerful and vehemently anti-online gambling owner of the Sands Bethlehem Casino in Pennsylvania, Sheldon Adelson, could flex his political muscle and perhaps influence already wary supporters of online gambling.
  • An element of the bill that doesn’t have consensus support, such as slot machines at off-track-betting parlors, could sink the whole ship.
  • A poison pill amendment (such as the highly controversial VGT amendment a large bloc of state representatives tried to insert when the bill was moving through the House) could be introduced in the Senate.
  • The governor could veto the bill.

While none of these are likely, they’re not impossible by any stretch of the imagination.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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