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 cant 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 lobbyists calling card since she hitched her lobbying wagon to Sheldon Adelsons anti-online gambling group. Lincolns op-ed was simply a rehashing of several previous columns penned by CSIG (virtually every point having been debunked) and didnt receive much attention. Lincolns 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 its 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 Pennsylvanias 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, Pennsylvanias 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.coms 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 Groves 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 states residents. Ramifications Considering the amount of attention Pennsylvanias press is giving this issue, its a safe bet that online gambling isnt 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 legislatures budget talks. It also lends a lot of credibility to the buzz from inside the gaming industry surrounding online gaming expansion in Pennsylvania.
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1 Online gambling in October?
2 Will the Senate actually do anything on gambling?
3 Hearing will also be held The chances of legal Pennsylvania online casinos coming as soon as early next year could hinge on six days in October. Online gambling in October? The state Senate has just six days left in 2016 to attempt to pass a gambling expansion package that the state government promised to pass this summer, as part of the plan to finance the current fiscal years budget. The $100 million earmarked for the budget would largely come from the legalization of online gambling in the state. The House already passed its version of a gambling bill, complete with regulation for iGaming and daily fantasy sports. The Senate met briefly in September but never tackled gambling at all. It returns from hiatus for planned sessions October 17-19 and 24-26. Those are the last days before the November elections that the Senate will meet, unless it decides to extend the brief session. Will the Senate actually do anything on gambling? At one point, it seemed like a foregone conclusion that the statehouse would act on gambling this year when it was included in the budget. Those beliefs were eventually replaced with cynicism, as it started to become clear the Senate did not agree on the moving parts in the larger gambling package. Disagreement appears to have little to do with the authorization of online gambling, however. One thing has changed recently, however. A state Supreme Court ruling drastically reduced the amount of money that the state is taking in via casino taxes, money that was earmarked for jurisdictions that host casinos. The legislature is likely going to act on that issue, and may consider the wider gambling expansion in tandem. Rep. John Payne, who has championed the online gambling effort, puts the odds of the Senate acting soon at about a coin flip. More from Online Poker Report: If nothing happens this month, any effort would have to wait until 2017. Payne told OPR that the groundwork that has been laid in the past two years should help online gamblings chances in the future. Hearing will also be held Paynes House Gaming Oversight Committee will hold a hearing next week that will examine the regulation of online gambling and DFS. That comes after a similar hearing planned for September was canceled. That hearing may be designed to just bring attention to the issue, and spur the Senate to act. Whether it will do so this month remains to be seen.
1 House to Senate: Its time
2 Bill is Paynes last shot before retirement
3 Expanded gambling will boost state budget The wait is over. More than two months after the Pennsylvania House passed a bill legalizing online gambling and daily fantasy sports, the House Gaming Oversight Committee is scheduled to meet on Tuesday for a public hearing reviewing states that have already legalized online gambling and DFS. That list includes New Jersey, Nevada and Delaware for online gambling. For DFS, those states are:
Missouri Common sense says the Senate should be holding a hearing on online gambling as well, but its lack of action has online gambling proponents and the House antsy over the bills future. The Senate has introduced a new DFS-only bill, but its chances to move independent of other gambling expansions is murky. House to Senate: Its time Tuesdays public hearing is, in one sense, might be just for show. The gaming committee and the House already approved the bill, so this isnt about convincing anyone in its own ranks. Experts are of the opinion that the meeting is about getting the Senate to pass a bill allowing PA online casinos and DFS. Heres the big picture:
The Senate has not yet voted on any bill containing online gambling or DFS
The Senates fall session is nine days long.
If the bill isnt passed during those nine days, its pushed back again; this time to 2017. Theres a sense that the committee is passively telling the Senate, It would be nice if you passed this bill since so many other states have already done it in the past three years. Bill is Paynes last shot before retirement Rep. John Payne, head of the Gaming Oversight Committee, has long been a vocal supporter of expanding the states gambling laws. However, Payne is retiring after the states November elections; a win like this before his final day in the House would be a sweet victory for the Dauphin County Republican. After the June vote, Payne released a statement lauding the Houses bipartisan vote in support of online gambling regulation: Right now, Pennsylvanians who are playing these games online are at risk for fraud and abuse, and its nearly impossible to prevent children from gambling online or to protect problem gamblers. This legislation is needed to safeguard our children, our problem gamblers and our gaming consumers. Without it, we are only allowing the wild west atmosphere that currently exists to continue. Expanded gambling will boost state budget While pro-gambling folks in Pennsylvania would love to see the state finally pass the bill, the states budget would be equally as happy; it includes $100 million in gambling revenue. That $100 million is possible revenue generated by online gambling in the state in year one, mostly from licensing fees. In 2015, Payne co-authored an opinion piece on PennLive.com, in which he estimated that online gambling revenues could top $300 million in a mature market. Casinos might want to see it, as well; August was one of the states first bad months, revenue-wise, in quite awhile.
1 A new gaming bill drops in the House
2 Whats in the online gambling portion of the bill?
3 What did Gov. Wolf say about gambling? The effort to legalize online gambling in Pennsylvania got a shot in the arm from two different sources this week: the legislature and the governor. A new gaming bill drops in the House The good news on Thursday came from the state House of Representatives. There, the first of several planned omnibus gaming bills appeared. As expected, the bill (HB 392) included language to legalize, regulate and generate revenue from iGaming. The bill contains much more than that, of course, including:
A remedy to the casino host tax that was struck down as unconstitutional by the state Supreme Court, with a yearly slot license fee on Category 1 and 2 casinos.
Authorization of multi-state progressive slot machines, as well as skill-based and hybrid slots.
Allowing tablet gaming at some airports. But one of the key points is online gambling. Whats in the online gambling portion of the bill? The bill that just surfaced is much like one that passed the House on two different occasions at least on the online gambling front:
Anyone wishing to operate PA online casinos or poker rooms would have to pay an $8 million licensing fee.
Anyone partnering with a licensee to offer online gaming would pay a $2 million fee.
Gaming revenue would be taxed at a rate of 14 percent, with an additional two percent going to casino host communities. What did Gov. Wolf say about gambling? There was also good news from Gov. Tom Wolf on the online gambling front, even though he didnt mention it by name. Wolf announced his plan for the budget for the rest of this fiscal year, as well as the next one. In his proposed budget, he earmarked $250 million from a gambling expansion that has not yet been passed. More from his budget plan: Despite Wolf being noncommittal on where the money will come from, the only way for that type of revenue to be realized would be to legalize online gambling.
1 The letter to the House on iGaming
2 Stakes are too high
3 Are Tomlinsons concerns valid?
4 Letter sets the stage for 2017 At least one Pennsylvania state senator is not excited by the Houses eagerness to move forward on a gaming expansion that includes legalization of PA online casinos. The letter to the House on iGaming Pennsylvania State Senator Robert Tomlinson (R-6th District) recently wrote a letter that urges caution and a measured approach to an omnibus gaming expansion passed on two different occasions by the House. Tomlinson said he would like the state to fix an unconstitutional casino tax on its own, before dealing with other gaming issues. To date, the Senate has not acted on anything other than that tax fix. One of those issues is online gambling (alongside daily fantasy sports). Stakes are too high Tomlinson devoted an entire section of his lengthy letter to online gambling, saying the stakes are too high to get it wrong and assumptions and projections offered to date are deeply flawed. His three main concerns are:
Cannibalization of revenue from PAs 12 existing casinos.
A lack of protection for underage users and problem gamblers.
Revenue projections for online gambling that do not mesh with reality. Of those, cannibalization appears to be Tomlinsons biggest concern. From the letter: Are Tomlinsons concerns valid? According to Online Poker Reports Steve Ruddock, most of his concerns have already been debunked. Thats particularly true of the cannibalization argument for iGaming: Online gambling is understood by much of the gaming industry to help activate relapsed casino patrons or attract users who werent visiting land-based casinos. Letter sets the stage for 2017 Pennsylvanias legislature will tackle gaming provisions including online gambling next year. Tomlinsons letter sets the stage for lawmakers and interests in the state that want to slow down on online gambling or do nothing at all. Meanwhile, proponents will continue to seek to pass language that would regulate online gambling and generate revenue for the state. At this point, its not clear which side will have the upper hand.