After both Pennsylvania and New York have taken their time in recent years considering the legalization of online poker, it’s possible there will now be a sprint to the finish for the two states. What’s going on in Pennsylvania online poker? The conversation on online poker in Pennsylvania’s legislature appears to be on hiatus, although an online gambling bill is also not entirely off the table in the state’s ongoing budget battle. The bill’s sponsor, Rep. John Payne, has indicated previously that the gambling expansion bill that includes regulation and legalization of online casinos and poker would be taken up in the spring. He also predicted that it would be passed in July. There has been optimistic talk from Payne on online gambling in the past, but it does appear like it will get serious consideration in 2016. Part of the reason it will get more momentum? Its neighbor to the north is looking into online poker, too. What’s going on in New York online poker? New York held an informational hearing about online poker in September, but ever since, the topic has been off the table in the Empire State. That all changed in recent weeks, as Assemblyman J. Gary Pretlow, head of the Assembly Committee on Racing and Wagering, introduced a bill that would legalize and regulate online poker in the state. Then, last week, a Senate version of the online poker bill made it onto the agenda of a committee hearing set for Feb. 2. While New York has been considering online gaming regulation for several years, legislation has never gotten very far. How serious this effort is remains to be seen, but the quick turn of events suggest that the online poker will get serious consideration in 2016. Who gets online gambling passed first? First off, it wouldn’t be a surprise if neither state passed online gambling legislation. (It’s important to note that Pennsylvania’s bill encompasses all online gaming, while New York is for poker only.) At the same time, as both states are considering regulation, there is value in being first to pass a bill, so they have a leg up on offering it in their respective state. There’s even a possibility that both states could see the value in passing legislation and entering into an interstate online poker compact that already includes Nevada and Delaware, and that would welcome New Jersey, should it choose to join. Pennsylvania has done far more public legwork on the online gambling question, and legislation has already seen meaningful progress, making it out of committee. Right now, Pennsylvania would have to get the edge for crossing the finish line first. Of course, the recent New York effort came nearly out of nowhere. If work has been done behind the scenes by the bills’ sponsors, then all bets are off, and online poker could get passed quickly in New York. We’ll get a better sense of just how serious New York is about online poker this week.

On Wednesday the Pennsylvania Senate Community, Economic, and Recreational Development Committee hosted a hearing that discussed, among other things, the legislature’s current efforts to expand into online gambling. The hearing featured a number of witnesses from the Pennsylvania Gaming Control Board (PGCB), who hit on topics ranging from regulations and safeguards, to problem gambling and the health of the state’s horse racing industry. Wednesday’s hearing occurred just a week after the state’s casino stakeholders appeared in front of the Pennsylvania Senate CERD Committee to talk online gaming expansion and gaming reforms. Both hearings provided positive momentum for online gaming expansion in the Keystone State, but there are still quite a few wrinkles that will need to be ironed out if iGaming is going to become a component of the state’s budget. That budget that is due in just 14 days, although there seems to be wiggle room for an extension. Regulators unafraid of online gambling The key takeaway from Wednesday’s hearing? The Pennsylvania Gaming Control Board is ready, willing, and able to tackle online gambling. PGCB Executive Director Kevin O’Toole was the first witness to tout the PGCB’s capabilities and willingness to take on this oversight role. “The Board is confident [Internet gambling] can be regulated,” O’Toole stated. The PGCB has “experienced and capable regulators,” O’Toole told the committee, adding that the board would be ready to regulate Internet gaming in an efficient and controlled manner if and when it’s legalized. According to O’Toole, the PGCB could have regulations drafted, licenses handed out, and the sites online within nine to twelve months of the legislature passing an online gambling bill. O’Toole qualified this aggressive timeline by saying it was dependent on the speed of the license application process. Another witness, Michael Cruz, the Chief Technology Officer of the PGCB, said the state would draw heavily on New Jersey’s experiences. “I’m not interested in reinventing the wheel,” Cruz told the committee. Cruz added that Pennsylvania regulators would look towards the New Jersey model in drafting Pennsylvania’s regulations. What are the remaining issues? Unlike California, the policy differences among Pennsylvania’s potential iGaming stakeholders don’t seem as hard-line. In-person registrations and whether Category 3 casinos should be allowed to apply for an online gambling license appear solvable. The pricklier issues seem to be differences between the state’s casinos and the legislature when it comes to an acceptable tax rate. The casinos and most iGaming advocates would like to see the tax rate set around 14% (the rate in Representative John Payne’s HB 649) while the recently introduced Senate gaming bill sponsored by Senator Kim Ward, SB 900, calls for a 54% tax rate on online gambling. However, these are merely the iGaming issues the state is wrestling with. The senate is trying to pass a comprehensive gaming reform bill, not a standalone online gambling bill. It’s the policies in the other sections of SB 900 that seem far more contentious. Liquor, Category 3 restrictions, and OTB’s are the REAL issues The issues that could sideline the bill (including online gambling) appear to be the following proposed brick-and-mortar gambling reforms:
Loosening restrictions on Category 3 license holders – specifically, the requirement that casino players must be guests or “members” of the casino.
Increasing the number of off-track betting locations (and slot machines at these locations) in Pennsylvania.
Making liquor available 24/7 at casinos. Category 3 Under SB 900, for a one-time $5 million fee, the state’s two Category 3 casinos would be able to do away with their “membership” requirements. Category 3 casinos are in favor of this proposal, while virtually every other casino is opposed to it. The strength of opposition seems contingent on the proximity to the Category 3 casino. This provision would not allow Category 3 license holders to add more slots or table games. Currently Category 1 and 2 casinos are permitted 5,000 slot machines and 250 table games, while Category 3 casinos are permitted 600 slot machines and 50 table games. OTB locations Another provision in SB 900 would allow casinos (this appears only to apply to racinos) to open multiple OTB parlors and place slot machines at them. Each OTB (there could be as many as 32) would cost $5 million with the slot revenue taxed at 54%. Category 1 racinos are all for this expansion effort, while Category 2 casinos (most notably SugarHouse Casino) are opposed to this type of expansion. Liquor around the clock The final sticking point is a provision that would allow casinos to serve liquor around the clock, which once again calls for a $5 million permit fee. Every casino is in favor of increasing the number of hours they are allowed to serve liquor, so this issue will pit legislator against legislator, as many are opposed to increasing the number of hours casinos can serve liquor. Upshot For the bill to move forward, these three non-Internet gaming issues (which seem far more contentious and far more difficult to solve) need to be addressed or scrapped. Alternatively, iGaming could be separated from the other parts of SB 900 and added to the budget. Pennsylvania’s iGaming future may very well hinge on his happening. Photo by Bestbudbrian used under license CC BY-SA 3.0.

Online gambling in Pennsylvania is starting to look like the real deal. In an op-ed that appeared in PennLive.com on Wednesday, Representative John Payne and Representative Nick Kotik made a strong case for legalizing online gambling in Pennsylvania. The two are the sponsors of HB 649, a bill that would legalize and regulate online poker and online casino games in Pennsylvania. Payne and Kotik are the Chairman and Democratic Chair of the House Gaming Oversight Committee, respectively. Making the case for PA online gambling The op-ed begins with Payne and Kotik making the following arguments for legalization:
Pennsylvanians are already gambling online and instead of Pennsylvania receiving millions of dollars in tax revenue, the money is going overseas.
These overseas sites are often loosely regulated or unregulated, posing a safety concern for players. “It makes no sense to leave online gaming unregulated, and sit idly while the state loses out on this income and players are unprotected,” Payne and Kotik noted. “Enacting this legislation would regulate an industry that is operating without any type of protections right now. It will provide funding for the state and make Pennsylvania casinos more competitive.” As if these statements weren’t powerful enough, the op-ed concludes with the simple yet poignant sentence, “Simply put, regulating online gaming is a win/win for Pennsylvanians and the state.” Public support for legalization Citing a recent poll commissioned by Caesars Entertainment in which 58% of respondents believed online gambling should be strictly regulated, Payne and Kotik remarked, “Pennsylvanians support what we’re trying to accomplish with our bill.” The duo went on to detail some of the other positive results of the poll, including:
65% of respondents felt online gaming revenue should be taxed and the proceeds used for vital state programs.
80% of respondents believed the state should make online sites use new technologies to assure that minors do not have access to online gaming.
52% of respondents said online gaming operators should be required to use technology that limits losses, deposits and the amount of time an individual can play. These results were a direct contradiction to the results of a widely-criticized Coalition to Stop Internet Gambling poll just weeks prior. HB 649 would deal with these issues Payne and Kotik also explain how their bill would bring about the consumer protections Pennsylvanians supported in the poll results. “Our bill offers the types of strict regulations needed to make online gaming work as it should in our state,” Payne and Kotik state. The safeguards that would be created by HB 649 are many and include:
Setting deposit and loss limits.
Employing geolocation technology capable of prohibiting out of state players from participating.
Utilizing player verification checks in order to prohibit minors from gaining access.
Enacting new criminal penalties to curtail illegal, unlicensed sites. The economic implications are also persuasive The op-ed finishes by detailing some of the revenue projections that have been submitted. According to Payne and Kotik, the industry could bring in as much as $120 million in its first year (this figure is likely a combination of tax revenue and licensing fees), and as much as $113 million annually. A more cautious estimate was proffered by Robert DellaFave at OnlinePokerReport.com. Upshot Payne and Kotik’s sustained and vocal support for online gambling is a positive sign for iGaming expansion in Pennsylvania, and hearkens back to Senator Raymond Lesniak’s vociferous crusade to bring online gambling to New Jersey. This is something that, as Chris Grove has noted, has been absent in California, and a key reason Pennsylvania has jumped ahead of California as the most likely state to pass an online gaming bill in the opinion of many industry experts.

If the recently concluded C5 Online Gaming Conference in New York City is any indication, the next state to pass online gaming legislation will be Pennsylvania. Speakers at gaming conferences tend to paint the industry in a positive light and offer cheerful outlooks for gaming going forward. C5 was no exception to this rule. However, this positive spin is often generalized and spoken about in abstract terms, as few of the industry’s analysts and consultants are willing to make steadfast declarations on the ever-changing gaming landscape. And the other group of conference attendees – politicians and regulators – are masters at deflecting questions and leaving the door open for all possibilities. There was one exception at C5, and that was Pennsylvania’s chances of passing an online gaming bill in 2015. an issue several panelists seemed willing to discuss and bullish about. No need to parse these comments One panelist, former New Jersey Division of Gaming Enforcement and New Jersey Casino Control Commission member and current Amaya Gaming Chairman of Compliance, Thomas Auriemma, went so far as to say it is “likely” Pennsylvania will pass a bill in 2015, and that the Pennsylvania bill “will move” this year. Auriemma’s comments should be given a lot of credence, as his previous positions in New Jersey have given him intimate knowledge of the dynamics in Pennsylvania, as well as the principles involved. An online gaming bill would likely be part of the state’s budget, which is due to be passed in June. This leaves precious little time to get the ball rolling in the legislature. However, as Auriemma noted, budgets don’t have to pass on time (nor do they). So we shouldn’t consider June a hard deadline for an online gaming bill in Pennsylvania, although he also indicated that it could be passed by June. Another panelist suggested that with the continued turmoil in California, all eyes should be turned to the Keystone State. Throughout the day, whenever Pennsylvania’s progress was broached by a panel there were many nods of agreement from other panelists and audience members. These sentiments were also espoused in private conversations. Steady online gambling regulation progress in PA Unlike California, where online gaming expansion has been on the table for at least five years with little progress made, Pennsylvania is currently on a trajectory similar to New Jersey in 2012 and 2013. What I refer to as the three year plan:
Year 1: The issue becomes a topic of discussion and a bill may or may not be introduced.
Year 2: Legislation is introduced and hearings are held but the bill dies in the legislature.
Year 3: Legislation is reintroduced, more hearings are held and the measure is passed. Pennsylvania is currently in year three. Momentum is clearly on PA’s side Not only is Pennsylvania in year three of online gaming talks, but several factors have accelerated the online gaming expansion process in Pennsylvania. A new GO Committee Chairman John Payne, a pro-online gambling legislator, took over control of the all-important House Gaming Oversight Committee. His predecessor, Mauree Gingrich, was extremely leery of online gaming expansion, telling local press in 2013 that online gambling was not a priority, nor was it on the legislature’s radar. When Payne was given the Chairmanship of the GO Committee, he outlined his goals thusly: “I view this new responsibility as a chance not only to ensure integrity in the industry, but explore opportunities for expansion and reform that could generate additional revenue for our economy.” Earlier this year I spoke with Chairman Payne and he reiterated his commitment to keep Pennsylvania gaming healthy and competitive, saying, “My mission statement is to keep gaming in general healthy, but in particular to make sure our casinos stay healthy and competitive against our surrounding states.” “The thing I don’t want to see happen is four casinos in Pennsylvania close like happened in Atlantic City. […] “For me, I’d rather have Internet gambling, fantasy sports betting, fix the small games of chance bill [bar machines], than vote to raise income or sales taxes,” Payne said. Bipartisan support Payne also has a willing partner on the opposite side of the aisle, as Democrat Nick Kotik (the Democratic Chair of the GO Committee) has cosponsored Payne’s online gaming bill, HB 649. Hearings, and hearings, and more hearings With Payne at the helm, Pennsylvania has hosted half a dozen (and counting) hearings on online gaming expansion. Aside from Las Vegas Sands representatives, there appears to be a strong appetite among Pennsylvania’s gaming interests and lawmakers, who not only are hosting hearings, but dressed-down Las Vegas Sands rep Andy Abboud and his demagoguery of online gaming. They also passed HR 140, a resolution urging Congress not to pass RAWA. May I have this dance? Finally, several of Pennsylvania’s brick and mortar casinos have entered into partnerships with online operators. This is a particularly strong indicator that positive steps are being made, as the same situation occurred in New Jersey prior to the bill being passed, here and here.

The Pennsylvania House of Representatives considered legislation to legalize and regulate online gambling on Tuesday, but after a series of votes, iGaming’s future is still uncertain. What happened in PA on iGaming The effort to move online gambling regulation forward in the state cropped up suddenly this week after reports that it would be considered in June. The old vehicle — HB 649 — was left behind. Lawmakers made an attempt to add the massive omnibus gambling expansion — iGaming included — to HB 1925. At first, an amendment was offered that included a contentious provision that would allow private establishments — outside of casinos — to offer video gaming terminals. That amendment was defeated, 122-66. Next, another amendment — this time with no VGTs — was brought forward by Rep. John Payne. (Payne chairs the House gaming committee and also is the architect of the gambling expansion effort.) After a lengthy debate, that amendment was also defeated, 107-81. That left observers wondering if online gambling had drawn its last breath, at least temporarily. Wait, not so fast on iGaming’s obituary Online gambling isn’t dead yet, however. The House approved motions to reconsider both gaming amendments right after they were defeated. The best guess for what’s happening? It’s a bit of a gamesmanship between lawmakers who want to authorize VGTs and those that do not. The VGT provision has long been thought to be a poison pill for the gambling expansion if it reaches the Senate. What’s next for PA online gambling? The amendments could be considered and voted on again, as soon as Wednesday. Online gaming proponents would like to see the non-VGT amendment get through. The gambling expansion and online gambling are seen as a way to deal with a deficit in the state’s pension system. Previously, online gaming had been a part of budget talks in the state because it could generate tens of millions of dollars in revenue annually. Pennsylvania has long seemed like the front-runner for the next state to authorize online gambling. While it’s difficult to handicap the effort’s chances right now, it’s still not dead.

I wrote about the oft-cited misconception that online gambling legalization is an expansion of gambling after two overly skeptical editorials appeared deriding the legislature’s efforts to pass an online gambling bill. This week a third paper made the same mischaracterization, and it’s common for the state’s newspapers to blast the idea of online gambling. It even went a step further, invoking fears of the long-debunked myth of cannibalization. What this newspaper says about online gambling The new editorial makes the same mistake as its predecessors, as the Delaware County Daily Times echoes the thoughts of the Philadelphia Daily News and the Lehigh Valley Express Times. The editorial board falsely believing the legalization of online gambling in Pennsylvania would authorize something that doesn’t currently exist, and somehow increase access to a form of gambling everyone in the state already has access to. The editorial board for the DelCo Times states: Getting it wrong on iGaming again As I noted in my rebuttal from last week, this line of thought just doesn’t pass the smell test. A person living in Pennsylvania can gamble online from the privacy of his or her own home today, with or without the state passing a bill to legalize online gambling. Wherever you currently live in Pennsylvania, you can go online and start gambling. All legalization would do is:
Institute much needed consumer protections;
Place the industry in the capable hands of the state’s land-based casinos;
Allow the state to benefit from taxing the industry;
Bring the industry under the regulatory sway of the state’s gaming control board. But wait, there’s ‘cannibalization’ too But the DelCo Times also goes a step further, insisting that online gambling will not only increase access to gambling, but that it will cannibalize the state’s existing casinos: No one ever seems to mention what might happen next, and what kind of effect – and decreased revenue – such a move would have on existing casinos if people no longer have to get off their own sofa to visit a casino. Many, in particular Harrah’s right here in Chester, are struggling now. We would imagine the thought of online gaming might not exactly be music to their ears. Someone should tell the editorial board that this theory has been debunked, and the notion Caesars would be against PA online gambling legalization is absurd. Despite the baseless speculation of the DelCo Times editorial board, the owner of Harrah’s Chester, Caesars Entertainment, is not concerned about cannibalization. It has stated many times at Pennsylvania hearings how beneficial online gambling has been to their properties in New Jersey. In April of 2015, Michael Cohen, the senior vice president and general counsel of Caesars Interactive, testified in front of the Pennsylvania House Gaming Oversight Committee that the “practical effects that we have seen is it has not cannibalized our business. If anything, it has enhanced our bricks-and-mortar business.” He repeated the company’s line in a Senate hearing. Old and tired arguments about online gambling Maybe if these editorial boards attended some of these hearings (or at least read some transcripts), they would have a better understanding of the impact of online gambling. Instead, they just trot out old arguments that have long since been discredited. And maybe they’d be able to avoid the embarrassment of making s statement such as: “Many, in particular Harrah’s right here in Chester, are struggling now. We would imagine the thought of online gaming might not exactly be music to their ears.” That same property’s parent company is pushing for online gambling legalization because it has helped bolster their business in New Jersey. Message to DelCo Times editorial board: It is music to their ears! Harrah’s Chester wants online gambling. And while Harrah’s may be down, most Pennsylvania casinos doing just fine, with eight straight record months. One does not have to look very hard to see how Caesars feels about online gambling legalization, but why bother looking, or reaching out and asking, when you can just guess? How does the saying go? Better to remain silent and be thought a fool than to speak and remove all doubt.

Pennsylvania State Senator Sean Wiley is seeking cosponsors for a proposed bill that would reform a number of gaming laws in the state, as well as legalize online poker. Wiley’s proposal is all encompassing, and contains several controversial policy points that are currently being debated in the state. However, online expansion seems to be the central component of his plan, and his online gaming ideas are quite problematic. If it gains any traction, the bill will likely be discussed at a tentatively scheduled gaming hearing in the state senate CERD Committee on June 10. Bill would legalize online poker but not casino games Wiley’s legislation would only legalize online poker in Pennsylvania. This will put his proposal behind the eight ball from the outset, as the state’s primary reason for online expansion is revenue, which is mainly generated through casino games, not poker. For instance, in New Jersey online casino revenue was triple the amount of online poker in 2014, a split that has grown to 80/20 in recent months. Poker-only legislation would be a hard sell to a state legislature looking to find revenue in order to keep Governor Tom Wolf’s plans to raise taxes at bay. Archaic tax rate and licensing fee More concerning are the numbers Wiley uses. “I am proposing a $500,000 online gaming license fee and a tax rate of 36% on online poker revenues,” Wiley’s proposal states. Both of these numbers are way off, as the lack of upfront licensing fees diminishes the skin operators have in the game. It would also fail to give the state enough capital to do the regulatory grunt work. The tax rate alone would make it extremely difficult for operators to compete against unlicensed sites and turn a profit. The current proposal supported by analysis from the iGaming industry (and the numbers present in Representative John Payne’s HB 649 online gaming bill) calls for comprehensive online gaming expansion, a $5 million upfront licensing fee, and a tax rate of 14%. Wiley’s numbers look more like proposals from several years ago, prior to Nevada, Delaware, and New Jersey legalizing online gambling. Fear of RAWA Generating revenue doesn’t even appear to be the impetus for Wiley’s call for online poker legalization. Wiley’s online poker proposal appears to be more of preemptive strike against potential federal legislation. “This would effectively grandfather Pennsylvania in should there be changes to federal law re: online gaming,” Wiley states. Effectively, online poker’s rollout would be in a holding pattern under Wiley’s plan. “My proposal would allow the PGCB to authorize online poker only after conducting a study to determine the impact online gaming would have on existing brick and mortar casinos,” Wiley writes. Not a serious effort on the iGaming front The decision to go poker-only, the exorbitant tax rate and piddling licensing fee, the fear of RAWA passing, and the call for a study of online gaming’s impact on brick and mortar casinos are clear indications that Senator Wiley has not put a lot of time or energy into studying this issue. Anyone who has examined regulated online gaming will dismiss his proposal as an amateur attempt. The one saving grace The one aspect of Wiley’s plan that could be used in a more serious online gambling bill is the creation of a casino reinvestment fund. “The first $10 million of online gaming tax revenues would be used to fund a casino investment grant program for a five-year period,” Wiley’s proposal reads. Other toxic issues As noted above, the bill is far-reaching and attempts to reform several areas of gaming all at once. Some are popular ideas, but some are hot button issues likely to derail Wiley’s bill even if his online gaming proposal was overhauled. 7 year moratorium on remaining licenses With the state still sitting on a fourth casino license (and another Category 3 license available in 2017), Wiley would like to put a seven year freeze on further development. Regardless of where you stand on further land-based casino expansion in Pennsylvania, calling for a seven year moratorium seems like a hyper-reactive stance. Wiley also wants to make the remaining Category 1 casino license, which would be awarded no sooner than 2022 under his plan, made available to racetracks. Tracks would also be given priority over a non-racing applicant. Remove prohibition on owning more than 1/3 of a second casino Even though he notes this anti-monopoly has been effective, Wiley wants to change the existing law on ownership restrictions, to account for, “the changing nature of the gaming industry,” which he claims could “make this provision problematic in the future in the event the number of viable operators decreases.” Legalize fantasy sports competitions at brick and mortar casinos Wiley’s proposal would legalize brick and mortar fantasy sports contests at Pennsylvania’s casinos. Changes to liquor laws Wiley’s legislation would allow casinos to purchase – for a fee of $250,000 with an annual renewal fee of $50,000 – a special permit that would allow them to adjust the hours they sell and serve alcohol, currently 7 AM to 2 AM. The permit doesn’t extend the total number of hours liquor is available, just which hours it’s available. Casinos would also be able to offer free drinks to any patron, not just those playing slots or table games. Changes to the hours of liquor availability in casinos is a major point of contention in Pennsylvania.

Proponents of internet gambling regulation in Pennsylvania were treated to some hope that an iGaming bill could still pass the legislature this year. Report: iGaming-only bill possible A story at EGR North America (paywall) revealed the first concrete indication that an internet gambling measure could be a part of budget talks in Pennsylvania. Democratic governor Tom Wolf and the Republican legislature have been at an impasse in negotiations for more than five weeks now. There has been little common ground between the two sides, as they have disagreed on just about everything. That includes how much to spend in the budget, to what to spend it on, how to pay for the budget and how to trim a deficit in excess of a billion dollars. But the EGR report provided a glimmer of hope, saying “as the budget talks have progressed, the bulk of the proposed gaming reforms have reportedly been scrapped, apart from egaming.” The story was otherwise bearish on the prospects of a regulatory bill passing, but it is positive in that an iGaming measure isn’t off the table. As politicians struggle to find revenue streams that they agree on, allowing iGaming and taxing it seems to be a point that the two sides could advocate to generate revenue. Stripping it down to just internet gambling There had been five pieces of iGaming legislation introduced and considered in the state legislature, but all of those have had gaming elements that affected brick and mortar casinos, as well. Those measures were largely more contentious than iGaming, although there are questions about implementation and the tax rate. The topic of internet gambling has stayed out of the political theater surrounding the budget impasse. The fact that iGaming is now a possible standalone concept increases its chances of passage. However, several casinos in the state had earlier opposed legislation that only dealt with internet gambling and removed other issues from the table. Representative agrees that online gambling is alive Rep. John Payne — the chair of the Gaming Oversight Committee in the state house and one of the authors of the aforementioned bill — backed up the assessment that online gaming is still in play in Pennsylvania. More from Card Player: Penn National Gaming, in its earnings call last month, seemed bearish on the prospect for iGaming in 2015, but even their executives didn’t shut the door entirely. While Pennsylvania’s budget remains up in the air, it appears that pretty much everything that could be a point of compromise between Democrats and Republicans likely remains in play. What remains to be seen is whether online gambling can be one of those things that the two sides agree should be a part of a revenue package moving forward.

Online gambling looked like it would have a real chance to pass in Pennsylvania in 2015 — at least for a short period of time. That enthusiasm died down quickly, as Republican leadership in the state legislature indicated it did not want a gambling expansion package to be earmarked as a part of the state budget. However, the sentiment about keeping iGaming and the budget separate came at a time when it appeared like the governor and lawmakers had gotten on the same page in ending a six-month budget standoff. After approving a partial budget via a line-item veto, Gov. Tom Wolf showed he and House Republicans are still far apart on a number of important expenditure issues, and how much to spend on the budget. Where are we now? Online gambling likely remains on the sidelines during the budget impasse, for now, but it’s still very much in play for 2016. Online gambling, not a part of the budget? A gambling expansion package was at least a possible part of a budget revenue plan for a short time, in the eyes of some Republicans in the House. That’s according to the sponsor of online gaming and expansion bill, HB 649, Rep. John Payne. He told Online Poker Report that revenue from gaming is currently earmarked for dealing with a deficit in pension spending; putting gambling revenue into the budget would just create problems down the road, Payne indicated. More from OPR: Does that mean there’s no chance online gambling and the larger gambling expansion package makes into the budget framework? Not at all. Given the fluid situation surrounding the budget — the status of which changes almost daily — it would probably surprise no one to see gaming expansion make it back into the conversation. The odds of that happening are perhaps not great, but they are at least greater than zero. Gambling expansion bill: Coming this spring? Even if online gambling, as part of a gambling expansion package, doesn’t come this winter, Payne believes it will be something the legislature considers this spring. Still, online gambling has now become a part of a larger overall gaming expansion effort in the state, and that brings with it potential pitfalls. When online gambling has been considered on its own merits earlier in 2015, it was largely noncontroversial. The questions about iGaming were in many ways logistical and practical, not whether the state should or shouldn’t have it. Now, however, every potential gaming expansion in the state has been lumped into HB 649, which started as an online-only bill. Now it contains far more controversial elements, such as the ability of private establishments to offer video gaming terminals. (The House amended HB 649 to include VGTs, and Senate Republicans indicated at one point that they didn’t have the votes to pass the gaming bill as-is, with VGTs included.) The final form of HB 649 may well be key to whether we see online gambling in PA in 2016. If unpopular measures remain a part of the plan, then the bill could die in the legislative process. If it’s trimmed down to include measures that lawmakers and gaming interests can agree on, then Pennsylvanians might be playing online poker by this time next year.

Pennsylvania is considered the quintessential battleground state when it comes to presidential elections, but the Keystone State is fast becoming the battleground on another front as well, online gambling expansion in the United States. While the anti-online gaming crowd can wage its war each and every time a new state explores iGaming expansion, Pennsylvania is starting to look like a must-win for the pro-legalization side, at least in the near term. Why 2015 and Pennsylvania matter If Pennsylvania passes an online gambling bill in 2015, it has the real potential to relight the fuse in other locales that were once strong contenders but more recently have shied away from iGaming. It could also cause New Jersey to reexamine entering into an interstate agreement with Nevada and Delaware. If Pennsylvania can’t get a bill passed this year, it pushes not only itself, but likely every state back a year. In that event, other states will almost certainly continue to take the “wait and see” approach, particularly if New Jersey continues to remain independent and the markets in the U.S. remain small and balkanized. With so much on the line it should come as no surprise that Pennsylvania newspapers have been alight with online gaming op-eds and polling data extolling the virtues of – and condemning the ills of – online gaming. CSIG chimes in The first op-ed salvo in Pennsylvania came from a familiar voice in the anti-online gambling movement, former Arkansas Senator Blanche Lincoln, which PennLive.com ran on May 15. Lincoln, a CSIG (Coalition to Stop Internet Gambling) co-chair, was last seen spouting nonsense on FOX News’ Huckabee and spent most of her PennLive op-ed to emit faux anti-gambling talking points that have become the former Arkansas Senator turned lobbyist’s calling card since she hitched her lobbying wagon to Sheldon Adelson’s anti-online gambling group. Lincoln’s op-ed was simply a rehashing of several previous columns penned by CSIG (virtually every point having been debunked) and didn’t receive much attention. Lincoln’s words likely rang hollow in Pennsylvania, where she is basically seen as nothing more than a paid lobbyist with no Pennsylvania connections throwing in her two cents where it’s not wanted. Bill sponsors make the case for legalization As is often the case when a newspaper prints an op-ed on a divisive issue, it allows for rebuttals, and the rebuttal PennLive.com printed was written by people with a lot of skin in the game, the sponsors of Pennsylvania’s online gaming bill HB 649. Representatives John Payne and Nick Kotik penned the most significant op-ed on the subject in a May 27 op-ed in PennLive.com, which as this column demonstrates is quickly becoming the preferred theatre of war for dueling op-eds and opposing polling data. You can find breakdowns of the strongly worded Payne/Kotik op-ed here, here, and here. Editorial boards jump into the PA online gambling fray The newspapers themselves are also lining up and picking sides. In addition to the Payne/Kotik op-ed, the Penn Live editorial board has come out in favor of legalization. On the other side is the Delaware County Daily Times, which posted an editorial against online gaming, as did the Times-Leader. Polls on top of polls on top of polls In addition to the editorials and op-eds, Pennsylvania’s newspapers have also been filled with polling data commissioned by both sides of the online gaming fight, which surprise, surprise, produced diametrically different results. The first poll appeared in early May, and purported to show Pennsylvanians were staunchly opposed to online gambling regulation. This poll was commissioned by CSIG, and a deeper look into the polling questions revealed some serious flaws in the methodology of the polling company, Harper Polling, which both Nate Silver and Nate Cohn have questioned in the past. As OnlinePokerReport.com’s Chris Grove found, asking the same basic question but removing all of the extraneous statements about the ills of online gambling led to quite different results. In addition to Grove’s findings, a later poll commissioned by Caesars Entertainment, one of the companies pushing for Pennsylvania to legalize online gambling, showed support for regulation among the state’s residents. Ramifications Considering the amount of attention Pennsylvania’s press is giving this issue, it’s a safe bet that online gambling isn’t simply being “talked about” in the legislature. This appears to be the real deal, and online gambling is likely to be a major conversation in the legislature’s budget talks. It also lends a lot of credibility to the buzz from inside the gaming industry surrounding online gaming expansion in Pennsylvania.