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In the ruling, the state’s high court found the local tax structure written into the state’s 2004 gaming act unconstitutional, and gave the legislature 120 days to fix it. To do so, the legislature will have to open up and amend the 2004 law before the end of January, but it’s likely to be taken care of this fall.
With action required on the local tax issue, the Senate will feel pressure to address other gaming reforms that until now, it has brushed aside — namely online gambling legalization.
Pennsylvania is on the precipice of passing a comprehensive gaming reform bill that would, among other things, legalize online gambling in the Keystone State. The gaming reform bill has already been passed by the Pennsylvania House of Representatives and earmarked as a funding mechanism for the state’s 2016-17 budget, which was passed by both the House and Senate.
But passage is not a foregone conclusion. The Senate doesn’t have the same sense of urgency when it comes to passing the gaming reform bill, seemingly content to let the matter lapse this session and (we hope) be revived in 2017.
Conversely, the House has been trying to motivate the Senate to act in 2016, with key house members making the case for the bill’s passage this year. They note the uncertainty a new legislative session brings with it, and the need for the estimated $100 million in revenue online gambling is supposed to bring in during 2017.
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With time running out (the Senate is only in session going forward from Oct. 17-19 and 24-26), and online gambling legalization hanging in the balance, the Pennsylvania House Gaming Oversight Committee decided to hold a public hearing on Sept. 27 to discuss online gambling and daily fantasy sports legalization in other states.
The hearing was seen by many as a not-so-subtle nudge from the House, intended to compel the Senate to vote on the gaming reform bill that the House passed back in June. But almost as soon as it was announced the hearing was rumored to have been called off.
The hearing was officially cancelled on Sept. 26, and attitudes toward Pennsylvania passing the bill in 2016 grew more pessimistic.
— Chris Krafcik (@CKrafcik) September 30, 2016
— Chris Krafcik (@CKrafcik) September 28, 2016
Following the Supreme Court ruling, the House Gaming Oversight Committee sprung back into action, announcing back-to-back hearings. The first, to be held on Oct. 18, is on the Supreme Court tax decision. The following day, the committee will offer an update on where the state stands when it comes to online gambling and daily fantasy sports.
Once again, it appears the House is ready to act, perhaps making the case for adding the local tax reform to the already existing gaming reform bill. The question is, will the Senate follow suit? Or, can the House force the Senate to act?
House Majority Leader Dave Reed told the Pittsburgh Post Gazette he wasn’t sure how the tax issue would be handled legislatively, but added, “I think it certainly puts more pressure to deal with gaming in the fall.”
On the other hand, Senate Minority Leader Jay Costa told the Post Gazette that a tax fix can get done this session, but only if it’s not complicated by the broader issue of gaming expansion.
So once again, it appears the Senate (for reasons unknown) isn’t interested in tackling online gambling this session, despite having approved it for budget funding.
Jeff Sheridan, a spokesman for Pennsylvania Governor Tom Wolf, didn’t want to address the recent court decision, but did say, “The governor has been clear he expects the Legislature to work on this matter [the gaming reform bill], as it was part of the budget agreement.”
With the governor and the House both intent on seeing the gaming reform package passed, the House could take a hard-line approach and refuse to pass a tax fix sent to it by the Senate if it’s not part of the broader gaming expansion package.