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But a new study on VGTs in another state could further complicate the path forward for legalizing them. And in turn, that could help the prospects for online gambling.
An academic paper written by PhD candidates at the University of Illinois took a closer look at the expansion of VGTs in the state and their relation to crime. The state legalized VGTs in 2012 with a law that resembles one under consideration in PA.
The paper contends that the unique environment for VGTs in Illinois — where jurisdictions can choose whether to allow them — makes for a good case study. Chicago does not allow VGTs, but they are accessible just outside of the city.
That allowed the authors to combine data on “establishments that adopted video gambling in the areas neighboring Chicago with monthly incident-level data on crime from Chicago. We use a difference-in-differences strategy that compares crime in census block groups of Chicago that are closer to video gambling establishments with those that are further away along with the timing of video gambling adoption.”
The takeway? According to the paper, “increased access to video gambling leads to a statistically significant rise in violent and property crimes in Chicago.”
More from the paper:
On average, being near at least one video gambling establishment is associated with a 7.5% and 6.7% increase in violent and property crime. These estimates control for potential confounders, including access to riverboat casinos, community area specific trends, and demographic controls. Reassuringly, these effects are strongest in the block groups closest to video gambling establishments. The effects decrease as gambling access declines, becoming zero after moving three census block groups away, and remaining at zero thereafter.
You can read the whole study here.
The argument from supporters of VGTs is that they already exist throughout the state. However, it’s pretty clear that the legalization of them would represent an expansion of what’s currently in private establishments, and the number of people able and willing to spend money on VGTs. It’s not likely that PA would be immune to the uptick in crime that Illinois experienced.
The new information comes just ahead of a September hearing in the PA Senate on the issue of VGTs. If VGT opponents come across this paper, it’s likely to be a topic for debate.
House Republicans continue to hold onto the idea that VGTs need to be a part of any gaming package, while the issue appears to be a non-starter in the Senate. Both chambers have passed legislation legalizing online gambling.
Regardless, VGTs threaten to derail iGaming regulation. On the flip side, the disappearance of the VGT issue would tacitly clear the way for online gambling and other gaming provisions.
There are plenty of other reasons to be wary of VGTs in the state, including the possibility they could cannibalize revenue to some extent at the state’s 12 existing casinos.
The first thing on the agenda of the PA legislature when it returns to action in September is the state budget. Gaming has remained in play in revenue packages to balance the budget, which is currently experiencing a $2 billion shortfall.
When everyone returns to Harrisburg, we should start getting a better idea of what kind of footing online gambling is on.
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