Can VGTs And Regulated Online Gambling Coexist In The Keystone State?

Pennsylvania Lawmakers Introduce Bill To Bring Slot Machines To Bars, Truck Stops, And OTB Parlors

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A long anticipated bill to authorize video gaming terminals (VGTs) at Pennsylvania bars, truck stops, and off-track betting parlors was introduced in the Pennsylvania House of Representatives this week.

The bill, HB 1010, is a rehashing of a failed effort from last session. This year’s VGT effort is believed to have more support.

Last year’s VGT proposal was part of a comprehensive gaming reform package that was defeated by a 66-122 vote. The Pennsylvania House of Representatives passed an alternative package, sans VGTs.

As was the case last year, Rep. Mark Mustio is the primary sponsor of the bill. Forty-six other state representatives signed on as co-sponsors of the legislation.

Where VGTs would be allowed in Pennsylvania

HB 1010 authorizes VGTs in the following places:

  • Up to ten terminals at truck stops.
  • As many as ten terminals at pari-mutuel, off-track betting parlors.
  • A maximum of five terminals at licensed bars.

VGT use would only be permitted during current hours of operation.

Relationship between suppliers and business proprietors

The bill would license suppliers to provide VGTs to proprietors of the above locations, with the establishment receiving no more than 25 percent of gross terminal revenue. These agreements between VGT suppliers and the local business must be for at least five years and no more than ten years.

The machines would be taxed at a rate of 34 percent until July 1, 2018, at which time the rate would be reduced to 29 percent. An additional four percent of gross terminal revenue would be paid to local communities.

Responsible gaming procedures

The addition of VGTs would require the host establishment to post responsible gaming signage in specified locations. The host must also provide responsible gaming brochures and materials.

Additionally, employees must undergo training and at least one employee trained in responsible gaming procedures must be on premise at all times.

VGTs are a prickly issue

Unlike online gambling, which is almost universally believed to be beneficial, most of the industry views VGTs as cannibalistic. The authorization of VGTs is one of the more polarizing issues in the Legislature, with vocal supporters and ardent opponents.

At a House Gaming Oversight Committee hearing on March 28, Perry Wood, executive director of the Erie County Gaming Revenue Authority, weighed in on the possibility of VGTs.

Wood told the committee VGTs should be tied to land-based casinos in order to mitigate any cannibalization.

“In other states, expansion of gaming to off-site locations like bars and clubs has resulted in a detrimental impact to slot revenues,” Wood said. “We believe VGTs will diminish revenues to Presque Isle Downs and not only negatively impact the economic development possibilities of local share gaming revenue, but also result in layoffs.”

Rep. Scott Petri, the chair of the House Gaming Oversight Committee, said he agreed with Wood, according to local reports.

Most of the state’s casinos oppose VGTs, but there are some casinos that stand to gain from VGTs coming to Pennsylvania. Penn National, which owns a VGT retailer in Illinois, is one such casino supporting the bill.

Are VGTs in addition to or instead of PA online gambling?

The big question is whether this VGT proposal is an alternative to online gambling or if the reforms can coexist.

Last year the House had to choose between a gaming reform package with or without VGTs. Online gambling was part of both bills. This time around it might be a choice between VGTs or online gambling, which could become a messy fight.

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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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