Even though it was included as a funding source, the gaming reform package, HB 2150, was only passed by the Pennsylvania House of Representatives. The Senate left passage of the bill for a later date.
The good news for online gambling supporters is that the Senate will return to Harrisburg on Sept. 26. The bad news is that it will have just nine days from that point to pass an omnibus gaming reform bill.
Failure to pass the bill during this narrow window doesn’t mean the online gambling bill will be dead in Pennsylvania (far from it), but it does complicate matters.
Nine days may not seem like much, but if the Senate strips out most of the controversial items, such as VGTs at airports and off-track-betting facilities, and leaves online gambling, daily fantasy sports, and the lifting of restrictions on the state’s Category 3 casinos for a one-time fee, it could be passed relatively quickly.
If the bill is passed by the legislature, it’s almost guaranteed Governor Tom Wolf will sign it, considering he already signed off on its inclusion in the budget.
Of course, there is also the possibility that it gets bogged down in the Senate with proposed amendments, and there is always the possibility of poison pill amendments or just run-of-the-mill obstructionism occurring.
Furthermore, even if the Senate does amend the bill before passage — which is a safe bet if it passes by the end of the month — it will get be sent back to the House for another vote.
This further complicates the process, as the House is only in session 11 days after Sept. 23, and as few as eight if the Senate passes the bill after Sept. 29:
Any major changes made to the gaming reform package in the Senate would leave the House very little time to debate and sort out the details, creating a second narrow window for passage.
If the Senate doesn’t act, or if the House and Senate cannot reach an agreement on a bill, the issue will have to be revisited in 2017. If this happens, the legislation would start from square one.
Thus, for a second time, the bill would need to go through committees and floor debates, and survive attempted amendments. All this, before being passed in both houses and signed by the governor.
The package would still be included in budget funding estimates, which helps its chances, but the debate over what should be included in the bill would begin anew.
That means the controversial topic of VGT expansion at bars and social clubs that nearly derailed the passage of HB 2150 in the House this year would also start from scratch.
In addition to VGTs, 2017 could see a new issue emerge. Assuming there still appears to be a budget shortfall, tax increases may be back on the table.
This could cut one of two ways.
The gaming reforms could be used to mitigate the size and scope of the tax increases, in which case they’ll be a benefit to lawmakers, allowing them to say without the gaming reforms tax increases would be even more severe.
On the other hand, if the legislature is going to raise taxes anyway, it may decide that some or all of the gaming reforms aren’t needed.
Finally, every delay allows new issues and/or new obstacles to emerge.
Gambling, physical and digital, is seen by many lawmakers as a touchy subject. It’s something they’d rather not have to vote on if at all possible.
So every day this drags on, ears can be bent by lobbyists, and new solutions can be promulgated.
Another factor to consider is how quickly Pennsylvania’s online gambling industry would be up and running.
If the bill is passed in early October (as opposed to January or February of next year), the Pennsylvania Gaming Control Board and the state’s prospective operators will have a three- to four-month head start on crafting regulations and getting the licensing process squared away.
Assuming there is a 9-12 month gestation period from the time an online gambling is passed to the time the sites go live, the difference between launch dates could be early Q3 of 2017 to late Q1 of 2018.
This is a big deal both for the state, which wants the tax revenue to begin as soon as possible, and for the industry as a whole. That’s particularly true if Pennsylvania is the linchpin that will lead to expansion in other states, as many believe it to be.
If Pennsylvania is preparing for launch in July 2017, other state legislatures may be able to pass a bill in 2017, instead of waiting to tackle the issue in 2018, and essentially pushing their own launch dates back another year.