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Pennsylvania eyes gambling expansion to help budget woes

TAGs: Dave Reed, Jasmine Solana, Mike Turzai, Pennsylvania, Rep. Nick Kotik

Pennsylvania eyes gambling expansion to help budget woesPennsylvania is finally mulling the legalization of online gambling to balance the state’s deep budget deficit.

State lawmakers, after being on the fence for a long time, are meeting next week to possibly consider legalizing Internet gambling, the Tribune-Review reported.

Democrat Rep. Nick Kotik, a leading proponent of the Internet gambling bill told the news outlet Republicans were “not very comfortable” with bills legalizing online gambling, but most of the new committee members “are not closing the door” on it. The House Gaming Oversight Committee (HGOC) panel has four new Republican members: Rep. Nick Miccarelli, Rep. James Santora, Rep. Kurt Masser, and Rep. Jason Ortitay who already said he’s “generally supportive” of online gambling.

Interest in Pennsylvania’s online gambling bill has intensified after the state entered its 105th day of budget impasse.

Gov. Tom Wolf and the Republican-led legislature have been locked in a months-long stalemate over the state budget, with the House voting down Wolf’s revised $2.4 billion tax package proposal. The two parties, however, could finally see eye-to-eye on the idea that offering more gambling options will solve the state’s budget woes.

House Majority Leader Dave Reed told the Associated Press lawmakers should explore other possibilities on the table—such as adding gaming options—before deciding to raise taxes.

House Speaker Mike Turzai believes expanding gambling options already had “bipartisan support,” while Stephen Miskin, spokesman for House Republicans, said they are looking forward to discuss the idea of gambling expansion with the governor, according to Philly.com.

Wolf, however, has long signaled a preference for using tax increases, believing gambling revenue will not provide the long-term stability that he wants. Wolfe spokesman Mark Nicastre told the Associated Press the administration is open to gambling expansion, but it shouldn’t be confused “with long-term sustainable revenue that’s going to fully fix the budget deficit.”

The legislation, if passed, could bring the state $120 million—primarily from licensing—in the first year alone, with the full package boosting the revenue up to $700 million annually, HGOC chair Rep. John Payne told Tribune-Review. The full package will include 24-hour liquor licenses, airport slot machines, skill-based gambling games, and secondary slot parlors, according to the report.

Initial proposals for licensing fees start at $5 million, while tax rates for online gambling revenue fall between 14 percent and 59 percent, but Payne said the figures are still subject to change. Slot machines in land-based casinos in Pennsylvania are taxed at 55 percent, while table games are taxed at 14 percent.

Online games will be opened to players physically in Pennsylvania, with the Pennsylvania Gaming Control Board overseeing the new gambling operations, Kotik noted.

Analysts believe gaming revenue alone will not solve Pennsylvania’s budget problem. Muhlenberg College political science professor Chris Borick told Philly.com cited New Jersey as an example. The state, where Internet gambling was legalized in 2013, reported $160 million in revenue in 2014, but online games only contributed $10.7 million.

“It’s really quite a path we’ve gone down, from discussing major shifts in the tax structure… to shaking the gaming tree one more time to see if it bears any fruit,” Borick said, according to the news outlet.

Aside from New Jersey, only Nevada and Delaware allow online gambling.

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