Pennsylvania iGaming On Track for Approval By the Fall

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Thursday, August 4th, 2016 | Written by Charles Washington

In 2015, rumors started circulating that Pennsylvania would become the fourth US state to legalize online poker before the year’s end. When December 31st arrived without any legislation being passed, however, many people speculated that Pennsylvania’s Governor Tom Wolfe would subsequently sign an online gaming bill by the summer of 2016. With no bill having still been signed, and Harrisburg in recess until September, the state’s leading champion for online gambling, Representative John Payne, has now expressed his confidence that Pennsylvania will finally pass iGaming regulation by this fall.

Good News for PA Online Gaming?

In a recent interview, John Payne, who has been responsible for driving the online gaming legislative push thus far, expressed optimism that iGaming laws would be passed this year, and there is some evidence to suggest that this is more than just wishful thinking. When the state’s balance sheet was drawn up in anticipation of preparing the Pennsylvania State budget, a $100 million gambling expansion package was listed in the line items, and the governor and Harrisburg lawmakers have apparently agreed on it.

So far, details as to exactly what will be in the aforementioned gambling expansion package are unknown, although it has been confirmed that it would include a law to increase casino taxation from 12 percent to 14 percent. Even with this and some other possible sources of state gambling revenue identified by industry experts as potentially being included in the package, it seems unlikely that Pennsylvania lawmakers would be able to reach a figure as high as $100 million without including online gaming revenues.

What’s Holding Things Up?

Representative Payne and his committee have had more than 54 hearings and meetings about online gaming over the last year and a half. In his recent interview, he said that he feels confident that everyone has had a chance to weigh in on the topic, and he says that there seems to be broad support for online gambling regulation that would prevent minors and compulsive gamblers from accessing online gaming sites, whilst ensuring that all gamblers are protected. He also said that 8 of the 12 casinos in Pennsylvania have already stated that they would move forward with applying for online gambling licenses as soon as possible, and that two more said they would also be interested in iGaming licenses in the future.

So what’s causing the delay? The sticking point seems to be the language used in the latest gaming bill that would allow slot machines to be placed in off-track betting parlors in Pennsylvania. The Pennsylvania Senate could not completely agree on what items should be included in a final gaming expansion bill, and as a result, further discussion of the matter was postponed until the legislature reconvenes in September. Payne pointed out that this was done with a number of other important matters as well, and that the postponement in no way indicates that online gaming legislation is doomed to fail.

Record FY 2015 Revenues

In the meantime, Pennsylvania reported its highest ever revenues of $3.23 billion in fiscal year 2015, marking a nine year-high since the state introduced legalized casinos in 2006. That figure also represents a 3.6% improvement compared to FY2014, with table game revenues higher by 8% at $839 million, and slot machine revenues up 2.3% to $2.4 billion. As a result, The Keystone State then received a total of $1.4 billion in gambling taxes for the year.

Furthermore, all but three of Pennsylvania’s twelve casinos reported year-over-year revenue growth for FY2015. Leading the way in terms of revenues was Sands Casino Resort Bethlehem with $228.165m, up by 12.39% from the previous year; followed by Parx Casino up 13.18% to $155.077m; and SugarHouse Casino up 11.04% to $104.75m. Also posting gains was the Rivers Casino (0.37%); Harrah’s Philadelphia Casino (3.07%); Mount Airy Casino (1.90%); Valley Forge Casino (13.27%); The Meadows Casino (9.22%); and Presque Isle Downs (2.85%).

Bucking the trend, however, was Mohegan Sun Pocono down -7.24% to $45.68m; Hollywood Casino at Penn National Race Course down -2.63% to $33.5m; and finally Lady Luck Casino Nemacolin down -4.75% to $5.14m.