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Gambling expansion likely for Pennsylvania in 2017, lawmakers say

| Monday, Jan. 16, 2017, 2:24 p.m.

Two Western Pennsylvania state senators are in the middle of a push for a comprehensive gambling expansion bill that is likely to add online casino games and resolve legal problems with a $10 million a year payment to communities with casinos.

Sen. Kim Ward, R-Hempfield, and Sen. Jay Costa, D-Forest Hills, plan to introduce their parties' versions of bills to bolster the state's gambling industry. Among the issues the bills could address are:

• Making Pennsylvania the largest state to approve online casino gambling for anyone physically within its borders. Only Nevada, New Jersey and Delaware currently allow internet gambling.

• Regulating Daily Fantasy Sports betting.

• Allowing gambling at airports or other non-casino sites.

• Determining a legally acceptable method for continuing the “local share assessment” that most casinos pay to the communities where they are based. The state Supreme Court ruled in September that the existing levy of a flat $10 million or 2 percent of gross slot machine revenue was unconstitutional because it treats casinos unequally.

• Eliminating the $10 “amenity” fee for people wanting to gamble at the state's two resort casinos, including Lady Luck Nemacolin in Fayette County.

The Senate and House formally begin work on Jan. 23. Sen. Mario Scavello, R-Monroe County, expressed confidence that a comprehensive bill will be approved.

“Sometime in March, we'll have something done and passed in the House and Senate,” said Scavello, chairman of the Senate Community, Economic and Recreational Development Committee, which handles gambling legislation. “It looks like online gaming has the support to pass. We can look at other expansions.”

Casey Long, director of policy and legislative affairs in the office of Senate President Joe Scarnati, R-Jefferson County, said Republicans expect to move a gambling bill through the Senate this session but did not say when. He said Ward will introduce the bill.

Costa outlined his proposal in a co-sponsorship memo recently circulated in Harrisburg. Ward said she will work with Scavello and other Senate leaders in drafting her bill. Scavello plans to meet Tuesday with key House and Senate members on what a comprehensive bill should include.

Republicans hold a 34-16 majority in the Senate and a 121-81 majority, with one vacancy, in the House. Last year, the House twice passed comprehensive gambling bills, including online gaming and Daily Fantasy Sports, but the Senate failed to act on them.

Ward, who was chair of the Recreational Development committee last session, has pushed for steering some tax revenue from gaming expansion to counties adjacent to those with casinos.

Westmoreland County borders Allegheny, Washington and Fayette counties, which all have casinos. But Westmoreland doesn't get any of the local assessment payment. In some areas, she said, multiple counties agreed to share the fee when casino gambling was legalized, but that didn't happen throughout the state.

“Westmoreland is the biggest example of a county losing out because we are surrounded by three counties that are making money from (casino gambling),” said Ward, now chair of the Senate's Labor and Industry committee. “We can leverage that for economic development. I want to see us economically survive and prosper.”

She said she doesn't object to allowing gambling at airports, but it shouldn't be limited to Pittsburgh and Philadelphia. If airport gambling is approved, an operator might want to offer it at Arnold Palmer Regional Airport near Latrobe, she added.

Costa said his bill would allow all forms of online casino gaming, including slots and table games, and regulate Daily Fantasy Sports.

“I think it's a natural progression of gaming in Pennsylvania, the next logical step,” he said. “To some degree, both (iGaming and DFS) are already present, particularly fantasy sports. What we're doing is regulating it.

“I think the people of Pennsylvania believe this is something that's appropriate right now.”

Costa's memo said the bill would impose a 25-percent tax on gross revenue from either form of gambling. The most recent House-approved bill would have set an online gambling tax rate of 16 percent and a DFS rate of 12 percent. In traditional casinos, the state gets 54 percent of gross slot revenue and 16 percent of table game revenue. Costa's proposal would ban internet gaming on casino property because of the difference in tax rates.

The tax on internet gambling would be divided between property tax relief and economic development projects.

Sixty percent would be deposited in the state's Property Tax Relief Fund; 20 percent would go toward economic development projects in counties bordering those that host a casino; and 20 percent would be available for projects in all 67 counties.

Costa's proposal also would authorize iGaming tablets at the Philadelphia and Pittsburgh airports for a five-year pilot period and permit online lottery games. Resort casinos could pay the state $1 million a year for five years to be open to all patrons at no charge.

His memo estimates the bill would generate $137 million for the state's 2016-17 budget, all from licensing fees. An internet gaming license would cost $10 million. Other proposed fees: internet gaming vendor, $5 million each; airport tablet gaming fee in Philadelphia and Pittsburgh, $2.5 million each; and DFS license, $2.5 million each.

Pennsylvania has 12 casinos and ranks second to Nevada in annual gaming revenue.

Ward and Scavello emphasized a desire to increase gambling tax revenue from expansion rather than boosting existing rates.

“They pay enough already,” Ward said. Noting the economic development and jobs casinos have brought to the state since the first one opened in 2006, she added: “We don't want to do anything to hurt that.”

Mark Gruetze is the Tribune-Review's gambling columnist. Reach him at PlayersAdv@outlook.com.

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