PennLive Op-Ed: Failure To Regulate Online Gambling Would Be “Fiscal Irresponsibility”

Accusing Pennsylvania lawmakers of “apparent fiscal irresponsibility” in neglecting a lucrative revenue source, the Pennsylvania Patriot-News voiced its support of legalizing and regulating online gaming in the state. Citing the state’s looming $2 billion budget deficit, the PennLive editorial urged legislators to capitalize on the burgeoning market “because it can,” arguing the state “cannot afford to ignore a legitimate revenue source.” No law in the state currently bans online gaming, and many residents are already active on virtual tables. But until Harrisburg takes an explicitly state-sanctioned approach to the issue, the editorial said, politicians are failing to capitalize on millions in potential tax revenue. “Pennsylvania has the means, the motive, and the opportunity to pass online gaming legislation before the end of this budget cycle,” the PennLive editorial board wrote. “Online gaming is a resource Pennsylvania should mine now.” “It’s no silver bullet, but online gaming in Pennsylvania will help ease the deficit,” the editorial read. Online gambling can enhance land-based casinos in PA According to a May 2014 economic forecast prepared by the Philadelphia-based Econsult Solutions, online gaming would “most likely” complement live casino play in the state. Pennsylvania could stand to gain $68 million in direct tax revenue from the industry in its first fiscal year, the report said, and could reap over $110 million in subsequent years. Last week was marked by increased debate over online gaming in the state. Preceding the PennLive staff editorial, two op-ed articles also appeared on the site, written by influential figures on both sides of the issue. In a May 27 letter, two state representatives called for online gaming’s legalization, claiming it “makes no sense to leave online gaming unregulated.” A recent flurry of opinion on the issue The op-ed was authored by representatives John Payne and Nick Kotik, respectively the chair of the state’s Gaming Oversight Committee and the committee’s top-ranking Democrat. Payne and Kotik are the primary sponsors of HB 649, a bill to regulate and tax virtual casinos in Pennsylvania. Under HB 649, Pennsylvania would issue licenses to online casinos at a cost of $5 million, or $1 million to vendors deemed “significant” by the state. These proposed fees would be significantly higher than those of neighboring New Jersey, where Internet gaming licenses are issued at approximately $500,000 each. The representatives called regulation a “win/win” scenario, though HBN 649 has not been scheduled for a vote since its introduction in February. In opposition to online gaming, Sheldon Adelson lobbyist and former Arkansas senator Blanche Lincoln also weighed in on PennLive. In an indirect rebuttal to Payne and Kotick, Lincoln cited a Time report that the economic impact of online gaming has been “drastically, laughably overestimated.” Lincoln warned the legalization of online gaming could undermine the health of the state’s live-play establishments, which she says have performed well. “Billions of dollars have been invested in Pennsylvania’s brick-and-mortar casinos, which rival some of the best facilities in the nation,” Lincoln wrote. “Pennsylvania did casino gambling right and now the industry supports an additional 25,000 Pennsylvania jobs and generates about $3 billion annually in total economic output.” Wolf is “open” to idea of legal PA online gambling While Pennsylvania Governor Tom Wolf opposed online gambling during his 2014 campaign, the state’s harsh fiscal outlook appears to have warmed him to the possibility. Wolf also ran, more prominently, on a platform of curbing taxes in the state. With a sizable deficit approaching, online gaming may now prove a more attractive solution for the governor than a fresh round of tax hikes. Payne recently called the governor “open-minded” toward the issue, and with the state’s finalized 2016 budget due June 30, many legislators have found themselves scrambling to triage the anticipated multibillion-dollar fiscal gap.

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