Pennsylvania Awaits May 1st Online Gaming Feasibility Study

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Thursday, April 3rd, 2014 | Written by Shane Larson

Pennsylvania was named as one of almost a dozen states in the US considering introducing some type of online gambling legislation this year. While the state Senate awaits the findings of a study on the future of gambling due to be released on May 1st, the opinions of lawmakers on either side range from staunchly in favour of a state internet gambling industry, to that of state Rep. Mario Scavello, who would like to see online gamblers face a $2,500 fine and up to a year behind bars.

As Rep. Mario Scavello, explains: “Here again, online gambling is best described as the Wild West. Online, there’s no one around to keep an eye on someone who doesn’t know when to stop. I believe that if you hit people in their wallets, we can start to crack down on the lawbreakers.”

In spite of differences, however, there may be some pretty major developments which may compel The Keystone State to embrace online gambling sooner rather than later.

Gambling market showing signs of decline

Pennsylvania only introduced casino gambling in 2006, but has since grown to replace neighbouring New Jersey as the country’s second biggest gambling market. Last year, for instance, Pennsylvania generated $3.11 billion in revenue for the whole of 2013, compared to the $2.86 billion collected by Atlantic City over the same period.

Throughout the whole of 2013, Pennsylvania’s state coffers also collected a considerable $1.4 billion in tax revenues, but despite the impressive figures, the state’s casino market is already showing signs of decline. Last year, casino revenues were actually down by 1.4% overall compared to 2012, with 11 out of the state’s 12 casinos reporting lower slots revenues throughout last year. Similarly, this year the state’s slots revenues have shown a decline in both January (-7%) and February (- 7.54%), with Richard McGarvey from the Pennsylvania Gaming Control Board suggesting New Jersey’s nascent internet gambling industry may partly be to blame for the situation.

Without a doubt the bitter weather experienced by Pennsylvania throughout December, January, and February would also have adversely affected casino business, but the continuing downward trajectory in gambling revenues will most likely be sufficient to inspire lawmakers to push for internet gambling legislation this year.

Competition continues to eat at Pennsylvania market

In addition to New Jersey’s online gambling market affecting Pennsylvania’s casino revenues, the state is also experiencing serious erosion of its profits by all neighboring states, including New York, Maryland, Ohio and Delaware.

“There continues to be increased casino competition from all of Pennsylvania’s bordering states and that certainly is affecting year-over-year revenue,” commented gaming board spokesman Doug Harbach.

The situation is only going to get worse, too, as Maryland and New York prepare for further online gaming expansion, with New York also having introduced a gambling bill to the state Senate this week, designed to not only legalize online poker, but also offer other online casino games, such as roulette, blackjack, and slots.

Causing further consternation for Pennsylvania’s casino industry are the words of New Jersey’s Borgata casino VP John Forelli, whose company launched www.BorgataCasino.com and www.BorgataPoker.com back in November, 2013. According to Forelli, Borgata’s online gambling marketing efforts have successfully managed to reclaim many customers the west New Jersey casino had previously lost to Pennsylvania casinos, setting a worrying trend for the future.

Anti-igaming groups seek to scupper gambling expansion

Although recent trends would suggest Pennsylvania should pass online gambling legislation and move as quickly as possible to protect its gambling industry, significant hurdles remain in the form of anti-internet gambling advocates.

Occupying a prominent position in efforts to stymy and even criminalize online gambling is Sheldon Adelson, who also owns the Sands Bethlehem casino in eastern Pennsylvania. Adelson and his Coalition to Stop Internet Gambling (CSIG) are likely to spend whatever it takes trying to keep online gambling from the state, and after PA State Sen. Mario Scavello announced his proposed bill to fine then imprison online gamblers, a swift statement was released by the CSIG, saying:

“Internet gambling has devastating social, economic and law enforcement consequences for our society. Taking swift and decisive action by criminalizing it would be a step in the right direction as we work to fight back against the online gaming industry.”

Adelson’s Sands Bethlehem casino might be located in eastern Pennsylvania, now a hot spot for anti-gambling sentiment, but the casino billionaire’s hypocritical tactics could easily backfire, however, and instead neutralise much of the impact made by his extravagant lobbying efforts. As Caesars CEO Gary Loveman recently commented, “since [Adelson] is an avowed non-computer user, an Internet virgin so far as I can tell, he does not know what he is talking about.” Loveman then questioned how the 80 year-old casino magnate could go from being “not enthusiastic about” online poker to opting to “have a jihad on the topic” within just 18 months.