PA online casinos again stand on the precipice of becoming legal
Global Poker
Online Poker Report

Five Years In The Making: A Closer Look At Pennsylvania’s Efforts To Legalize Online Gambling

PA online casinos timeline
Pennsylvania is poised to legalize online gambling, but anyone who has paid even a modicum of attention to this issue has seen this movie before. The state has been on the precipice of passing online gambling in each of the last three years, only to come up short at the last minute.

Here’s a look at how Pennsylvania online gaming got to where it is today.

2013: The first inklings of PA’s online gambling ambitions

Pennsylvania state Rep. Tina Davis was behind the state’s first foray into online gambling legalization when she introduced H 1235 in April 2013. The bill was modeled on online gambling bills passed in states like New Jersey, as it sought to legalize online casino games and online poker, with the state’s casinos serving as the operators.

In the end, Rep. Davis’ bill turned out to be little more than a conversation starter.

By that June, the legislation found itself stuck in committee limbo, thanks to House Gaming Oversight C0mmittee Chair Tina Pickett pumping the brakes.

Throughout her tenure as chair, Pickett proved herself an online skeptic. Pennsylvania’s online gambling ambitions would have to wait until she was replaced as chair in 2015.

However, 2013 wasn’t a lost year on the online gambling front.

Rep. Rosita Youngblood, the Democratic Chair of the Gaming Oversight Committee, helped push online gaming forward and balance out Rep. Pickett’s opposition. Her efforts included holding the first hearing on the issue, which took place in front of the Democratic Policy Committee in April 2014.

Throughout the process, Rep. Youngblood has been one of the staunchest supporters of online gaming.

That December, the Senate joined the conversation. The Senate didn’t introduce legislation to legalize online gambling. Rather, it commissioned a study via a resolution.

2014: Positive study sets the table for future action

The study commissioned by the Senate, and carried out by the firm Econsult, was submitted to the legislature in May 2014. It’s seen as one of the most important developments for online gambling in Pennsylvania. The report provided online gambling supporters clear, official evidence to present to their fence-sitting colleagues.

With its favorable findings, co-sponsorship memoranda for online gambling bills popped up in both the House and the Senate in early June.

Around the same time, the Senate Committee on Community, Economic and Recreational Development (CERD) held an online gambling hearing.There the state’s casino operators went on the record on the issue for the first time.

Legislation was still given a red light by leadership. But the June 2014 hearing turned Pennsylvania into a serious online gambling contender.

2015: PA gets serious about online gambling

It was year of change in the legislature. Pickett was out as Gaming Oversight chair, replaced by Rep. John Payne.

Unlike his predecessor, Payne was a strong supporter of online gambling. He quickly introduced legislation that February. Payne also scheduled and presided over dozens of hearings to further study the issue and gain input from potential stakeholders.

Payne wasn’t the only lawmaker trying to craft Pennsylvania’s online gambling future. Several other online gaming bills appeared throughout the year (here, here, and here).

The Senate bill threw a serious monkey wrench into online gambling talks, as it was the first inkling of a still-unresolved issue: tax rates.

In the end, Payne’s was selected as the blueprint for legislation, and it made incremental progress throughout 2015.

As it does every June, the legislature turned its focus to the state budget. In doing so, online gambling — and the fast cash it promised via upfront licensing fees — suddenly became a hot topic of conversation.

Online gambling bounced between being in and out of the state budget multiple times from June through December. The legislation was amended, passed by committees and merged with other gaming reforms.

The hype surrounding online gambling was growing. But at the end of the day, it was not included in the budget.

Online gambling’s inability to weasel its way into the budget seemed like a setback. But as Rep. Payne noted in a December interview, using online gambling revenue to patch holes in the budget was never part of the plan. The plan was to pass iGaming legislation in 2016, alongside pension reform.

2016: Is this the year?

Following the tease of 2015, 2016 was expected to be the year the Pennsylvania would pass an online gambling package.

The first few months of 2016 came and went with little action. As soon as spring rolled around, things started heating up.

The original plan of tying online gambling to pension reform never came to pass. So all of the issues (including daily fantasy sports) were rolled into the state budget. That created a veritable minefield of interwoven issues the legislature would need to navigate.

During the budget debate, a few unexpected opponents of the bill emerged (Parx Casino being the biggest). A second, even more volatile issue, surfaced alongside tax rates: VGTs, or video gaming terminals.

In late June, after a contentious vote that included a gaming package with VGTs and without (the bill sans VGTs came out on top), the House passed a comprehensive gaming package.

Online gambling looked like a done deal at this point.

No, online gambling wasn’t meant to be

By mid-July the mood had changed. The Senate decided to kick the can down the road and wait until the fall to tackle gaming.

Author’s note: Ironically, in 2017, roles would be reversed, and if the House sent the same bill to the Senate this year, it would likely be signed in a hot minute.

The Senate’s decision to wait until the fall would prove to be a very costly delay. It allowed a third, wholly unanticipated issue to emerge: The Pennsylvania Supreme Court’s ruling that the local share tax in the state’s gambling laws was unconstitutional and needed to be fixed.

Despite bills emerging from both chambers to fix the local share tax problem (a serious package in the House and a not-so-serious temporary fix in the Senate), a compromise couldn’t be reached. Both issues — gaming reforms and the local share tax fix — were put on hold until 2017.

The budget eventually passed, even though it counted on money from the yet-to-be passed gaming bill. That piece of legislation was never passed.

In December, an anti-online gambling letter sent by state Sen. Robert Tomlinson (he represents the district that includes Parx Casino) to his colleagues in both chambers came to light. The letter helped explain the behind-the-scenes lobbying that was at least partially responsible for the stalled gaming bill.

2017: Legislature is running out of runway

Waiting until 2017 has put the legislature behind the eight ball, but it’s also further complicated matters.

In May, the Senate passed a highly flawed online gambling bill. In June, the House fixed most of the flaws but added one of its own: VGTs.

Basically, 2017 has been more of the same. Soft deadlines have come and gone. Every time passage seems inevitable, lawmakers come up with reason after reason to hit the pause button.

Meanwhile, Gov. Tom Wolf and the legislature continue to count on money that will be generated from a gaming package toward the state budget, despite refusing to pass the actual legislation that would authorize the reforms.

So here we are, watching the legislative clock tick once again.

Sign Up For The Grove Report – US Online Gambling Industry Insights Delivered To Your Inbox:
Steve Ruddock
- 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.