PA Online Gambling momentum Continues To Accelerate

Pennsylvania House And Senate Attempting To Schedule Joint Hearing That Could Prove Critical To Online Gambling

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A number of strong signals point to online gambling legalization remaining on track in Pennsylvania, but the cancellation of a scheduled hearing to discuss gaming expansion has muddied the waters a little bit.

Replacement hearing could occur next week

The now-canceled hearing was to take place in front of the House Gaming Oversight Committee. Efforts are now underway to schedule a joint gaming reform hearing before both the House and Senate, according to multiple sources close to the situation.

A joint hearing would likely speed up the process by helping the two legislative bodies hash out any remaining differences when it comes to the particulars of the gaming reform bill.

The House and the Senate have been at odds on gambling expansion in general, and regarding online gambling specifically.

Optimism remains

There are also several other reasons to remain optimistic about online gambling passing in Pennsylvania:

The budget

As noted above, Wolf has released his FY2017/2018 budget, which made mention of the legislature’s commitment to pass a gaming reform bill that was designed to help fund Pennsylvania’s 2016/2017 budget and years beyond.

In the executive brief on the 2017/2018 budget, Wolf stated:

“As part of the final 2016-17 Budget agreement, the legislature committed to enacting a gaming expansion proposal that would generate $100 million in the current fiscal year.

This commitment continues to be reflected in the 2017-18 Budget, which further proposes an additional $150 million in revenue from gaming expansion for the budget year.”

It should be noted that Wolf didn’t specifically mention online gambling, but there doesn’t seem to be any way to reach his numbers without it. And as industry analyst Robert DellaFave wrote, it might be hard for Pennsylvania to hit the gaming projections with online gambling, let alone without it.

Even though a gaming reform bill hasn’t passed, last year the Pennsylvania House and Senate included $100 million of projected revenue from online gambling and other gaming reforms as a funding source for the state’s budget.

This pre-commitment by the legislature has led to many people believing it’s not a matter of if, but when, online gambling is legalized in Pennsylvania.

The latest gaming reform bill in Pennsylvania

The latest online gambling and gaming reform bill is HB 392.

The bill, introduced last week, is similar to a bill passed by the entire House of Representatives late in the 2016 session. The Senate chose not to vote on that bill prior to the close of the 2016 session.

Not only would HB 392 legalize online gambling, it would also:

  • Legalize and regulate daily fantasy sports
  • Fix the local share tax situation
  • Authorize multi-state progressive slot machines
  • Authorize skill-based and hybrid slot machines
  • Authorize tablet gaming at certain airports
  • Remove the casino amenity requirement for Category 3 casinos

The Senate is rumored to be working on its own bipartisan gaming reform package.

The overarching question is whether or not the two legislative bodies can come to an agreement on several key points, including the tax rate that will be imposed on online gaming operators. The House bill calls for a 14 percent tax rate, while the Senate is thought looking for a rate of 25-54 percent.

The canceled hearing

The cancellation of this week’s hearing is disheartening, but it may not be overly important, particularly if the rumors of a joint hearing are accurate.

During the 2015/2016 legislative session the Gaming Oversight Committee held roughly 50 such hearings, so the heavy lifting has already been done.

That being said, the canceled hearing would have likely helped clear up several questions that continue to linger in the House, including how the new leadership team views the different parts of the gaming reform package.

Along with usual turnover, both committee chairs from last session have retired: Representative John Payne and Democratic co-chair Nick Kotick, both of whom were strong advocates of online gambling legalization and regulation.

New chairman Scott Petri twice voted against gaming reform packages last year. Both measures were ultimately passed by the House, but were not acted upon in the Senate.

New Democratic co-chair Patrick Harkins has been a member of the House since 2007, but he’s not recorded as voting on either HB 2150 or HB 1887 last year.

That being said, several key members of the committee who are in favor of online gaming legalization and regulation will be returning, including Reps. Rosita Youngblood and George Dunbar, who are the driving forces behind HB 392.

- 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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