Youngblood: If PA Online Gambling Doesn't Pass In 2016, Taxpayers On Hook For $100 Million

Rep. Rosita Youngblood: Waiting On Pennsylvania Online Gambling Is A Risk Not Worth Taking

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The clock is ticking on an omnibus gaming reform bill currently sitting idle in the Pennsylvania State Senate. The bill, HB 2150, would, among other things, legalize online gambling in Pennsylvania.

The Senate is set to reconvene on Sept. 26, but for just three days. If the bill isn’t passed during this period, its last chance will be a six-day period in late October (17-19 and 24-26), after which time will have run out on the 2016 legislative session.

The bill has already been passed by the Pennsylvania House of Representatives and was included in funding estimates for the state’s 2016-17 budget.

Failure to pass the bill during these two small windows isn’t the end of the road for online gambling, but it will delay and complicate matters in 2017.

This is according to Representative Rosita Youngblood, a sponsor of HB 2150, and an advocate for legalized online gambling . Rep. Youngblood made the case for legalizing online gambling in an op-ed written this summer.

Online Poker Report spoke with Rep. Youngblood this week to get her thoughts on the bill’s chances in 2016.

Online Poker Report: What are the points of contention holding up HB 2150?

Rep. Rosita Youngblood: The version of House Bill 2150 that passed the House was a truly bipartisan effort — and included a lot of changes to the Gaming Act that came from many different stakeholders. It is something that I feel is a strong, comprehensive and thoughtful product that took nearly a year to develop. So, ideally, I would like to see the Senate take up HB 2150 as it stands — as a complete document.

But I understand in these final months, the Senate stills needs to work out some of the issues in HB 2150 with their members – primarily relating to slot machines at OTBs and other ancillary facilities. So realistically, we should be able to move forward with a final product this fall that has the much needed regulation of iGaming and daily fantasy sports — coupled with important technical changes requested by the Gaming Control Board and some other technical changes that impact local projects, like the Pittsburgh Regional Airport. There is not a lot of contention with iGaming and DFS — so I do I think that is a realistic expectation for the 10-12 session days we have left this year.

In addition, I do believe that sooner, rather than later, we will need to address the needed changes to the Category 3 requirements, as well as position the Commonwealth to capitalize on any changes to federal law related to sports betting, but this fall, at a minimum, moving iGaming into a regulated and legal space, and finally getting a grip on daily fantasy sports, should be a priority. Getting those done is a no brainer.

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OPR: How important is it for HB 2150 to pass this year?

Youngblood: We have 12 voting days before the November general election. That creates a tight time frame to navigate, but when we left Harrisburg in July there was an agreement to get $100 million from gaming. If we do not pass something this fall, the taxpayers of this Commonwealth will be on the hook for that $100 million.

In January we will have a brand new legislature: new house members and maybe new senate members. We will definitely have two new chairmen of the House Gaming Oversight Committee. So we have to start the whole process from scratch. That lends to it additional delays in getting something passed, and with $100 million on the line that’s a risk we cannot take. Not to mention we will have a brand new attorney general, and it is not clear where they would stand on the legality of daily fantasy sports in the Commonwealth. There is a lot at stake by waiting.

In addition, the NFL season has already kicked off. I saw a statistic that nearly $2.5 billion in entry fees were played on daily fantasy sports in 2014. And it was mentioned that 75 percent of all daily fantasy sports entry fees went to NFL games. If we wait until next year, we are basically telling two-thirds of consumers who play daily fantasy football that we are not concerned about protecting them.

Also, nearly 50 percent of individuals playing daily fantasy sports also play, or have played, online poker. These are similar players. So in my mind, we need to pass a bill that regulates iGaming and DFS so that we can protect consumers and safeguard against problem gambling and underage gambling.

I wrote an op-ed over the summer that highlighted all of the reasons why we need to regulate iGaming now, and those reasons still stand. The debate around iGaming is not about whether we finally allow it to exist within our borders, because the reality is, it’s already here. iGaming exists in Pennsylvania, just in the shadows of an unregulated space.

For me and many of my colleagues, regulating iGaming is the only way to truly rein in black market, off-shore operators that prey on problem and compulsive gamblers, and could care less about protecting against underage gambling. And that is why we need to get a bill to Gov. Wolf’s desk this fall.

OPR: What are the obstacles that could appear if the bill needs to be reintroduced in 2017?

Youngblood: As I just mentioned, both of our current Gaming chairmen in the House are retiring, so we will have two brand new people in charge of the committee that oversees gaming policy in the House. And we will have a brand new attorney general. Would we be able to get a new bill drafted and positioned by April or May of next year? Sure. But there are a lot more unknown variables.

The issue has been vetted by the current membership of the House and Senate. The leaders of all four caucuses, plus the governor, agreed to include $100 million in revenue from iGaming fees and taxes. So there is no reason to wait to pass something next year when we will have a brand new legislature. It makes no sense.

OPR: Are there any amendments the Senate may be considering that would make it difficult for an amended gaming reform bill to pass in the House?

Youngblood: Not that I am aware of, no. I think realistically iGaming and DFS, and potentially the issue related to our Category 3 resort licensees, is what we could see come out of the Senate this fall. But I haven’t heard about anything outside of what was already discussed being included in the Senate. There are a few specifics to keep an eye on, like tax rates, license fees, etc. But if something begins to move we will be able to have those discussions with the Senate at that time.

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- 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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