Internet gambling tempts Pa. with $113M tax gain
HARRISBURG — With Pennsylvania staring down an estimated $1.2 billion budget deficit, a House-Senate financial report released on Wednesday says the state could gain $113 million in tax money annually from Internet poker and casino games.
Depending on who's talking, that could mean plugging vital programs to avoid cuts and tax increases — or, from another perspective, putting children and vulnerable Pennsylvanians at risk of gambling addiction.
The state could gain millions more by tapping into sports betting, fantasy games and prediction markets, such as betting on the outcome of presidential elections, said the report prepared by Econsult Solutions for the Legislative Budget and Finance Committee. It said Internet gambling would have minimal effect on land-based casinos and might even complement them.
“The only way you can close a deficit of that size is with budget cuts in areas such as health care or education, or with revenue increases,” said Sharon Ward, director of the Pennsylvania Budget and Policy Center.
Money from a natural gas drilling tax might be needed, but online gambling won't raise enough to be significant, she said.
The American Gaming Association says Americans spent nearly $3 billion with illegal offshore Internet gambling operators in 2012, the most recent figures available.
Pennsylvania's 12 casinos generated $3.1 billion in total revenue and $1.4 billion in state and local gambling taxes in 2013, according to the report. Regulators are expected soon to award a license for a second Philadelphia casino, and a decision on a racetrack/casino in Lawrence County is anticipated this year.
Senate President Pro Tempore Joe Scarnati, R-Jefferson County, said the Legislature would explore online gambling. Options for utilizing such revenue “remain on the table,” his spokeswoman said.
Tax money from the casinos since their 2006 opening provides benefits from property tax reductions to aiding local governments, police and emergency services, and easing the strain on the state budget, Scarnati said.
Such gambling proposals would make high-stakes gambling available “on smartphones, tablets and computers,” putting kids at risk, said Tom Shaheen, vice president of policy for the nonprofit, nonpartisan Pennsylvania Family Institute.
The report suggests easing the regulatory climate for casinos, experiencing increased competition from surrounding states. The recommendations range from removing or lessening licensing standards for vendors to reducing state police presence in casinos.
The report says Internet gambling and traditional casinos cater to different markets. Internet gamblers generally are younger, predominantly male, with higher incomes and more education, and more likely to be employed, it says.
“The fact that iGaming caters to a market of new gamers presents casinos with an opportunity to attract new customers,” the report states.
Though Internet gambling cannot provide the social interaction and amenities of traditional casinos, online betting allows players to place smaller bets, play several tables at once, play from home and avoid crowds.
“This, combined with the fact that iGaming typically happens in the home in the afternoon or evening, suggests that for many this is a substitute for other forms of home entertainment, rather than a substitute for traditional offline casino gaming.”
Senate Majority Leader Dominic Pileggi, R-Delaware County, said the Senate will look at all forms of gambling revenue the report raises. He stressed that he does not support a particular proposal and thinks lawmakers need to evaluate the ideas carefully.
Still, he said, “it's not that complicated. Other states have done this.”
Nevada, New Jersey and Delaware have allowed Internet gambling since last year. Under federal law, users must be physically in the state to bet online.
The Coalition to Stop Internet Gambling issued a statement saying revenue from Internet gambling has fallen short of projections where it's legal.
Sen. Kim Ward, R-Hempfield, who chairs the Senate panel regulating casinos, said it would hold a hearing in early June. Ward supports regulating and taxing Internet gambling if it brings in hundreds of millions of dollars, as the consultants suggest.
It should be paired with pension reform, which is causing some of the state's budgetary problems, she said.
“We want to make sure we don't hurt the existing casinos,” said Ward, who chairs the Community Economic and Recreational Development Committee. She wants to hear from casino operators, the Department of Revenue and the Gaming Control Board.
Rep. Dwight Evans, D-Philadelphia, is skeptical that Republicans controlling the Legislature will move forward with expanded gambling.
“Gambling happened with (Ed) Rendell,” a Democratic governor, in 2004, Evans said. He believes Republicans like it “because it's a voluntary form of taxation” but that they remain wary overall.
Republican Gov. Tom Corbett was noncommittal. His spokesman said: “The devil is in the details.”
The $1.2 billion deficit projection is from the Independent Fiscal Office.
Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or firstname.lastname@example.org. Staff writer Mark Gruetze contributed to this report.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Penguins need trade-deadline acquisitions to bring toughness
- Blue Jays’ Martin has ‘nothing but praise’ for former Pirates teammates
- ‘Time for bold change,’ Wolf says in outlining $30B state budget
- Rossi: Pirates’ post-Martin plan comes with a catch or 2
- Artist born without arms, legs gives Hampton students peek into her world
- Report identifies Mon-Yough residents who are at risk in train disasters
- Suspect in multiple Mon Valley armed robberies arrested
- Safety Vinopal, other former Panthers perform for NFL scouts at Pitt’s Pro Day
- Mon Valley officials optimistic salt supplies will last
- Unity planners OK proposal for Route 30 retail development
- Spring training breakdown: Pirates 8, Blue Jays 7