Pennsylvania Gambling: Playing Politics Strengthens Industry’s 2016 Outlook

Posted on: December 31, 2015, 04:30h. 

Last updated on: December 16, 2015, 02:39h.

Governor Tom Wolf Pennsylvania gambling
Governor Tom Wolf is open to discussing the merits of expanding Pennsylvania gambling online in order to fund increases to education spending. (Image: Michael Wirtz/

Pennsylvania gambling has endured a ride more eventful than a night at the craps table since former Governor Ed Rendell (D) persuaded the state’s legislature to legalize commercial gaming in 2004.

Today, the country’s sixth most populated state is home to 11 casinos, six racinos and five stand-along venues. More than a decade ago, Rendell turned to gaming as way to increase revenues for the cash-strapped state.

It was a solution at the time for Rendell, but fast-forward 11 years and first-term Governor Tom Wolf (D) is back in a similar position.

Wolf and the Republican-controlled Senate and House clashed for over 150 days last fall discussing a budget agreement, the governor looking to raises expenditures for education and spending programs while the legislature is adamant on not raising taxes.

The political bickering that left the capitol divided has helped pave the way for online gambling to gain traction among lawmakers.

After the House Gaming Oversight Committee voted to move an iGaming bill to the floor last month, it appears Pennsylvania gambling is once again poised for expansion.

2015 Primer

During the last year, three bills were introduced into the House that all aimed to legalize some sort of online gaming.

State Rep. Nick Miccarelli (R-Delaware County) brought legislation to authorize Internet poker only, while State Rep. Tina David (D-Bristol Township) sought to permit poker and casino games.

However, it was State Rep. John Payne’s (R-Hummelstown) HB649 that emerged as the victor on the legislative front, his online gambling proposal acquiring the most support and discussion largely in part to his chairing of the House Gaming Oversight Committee.

Gambling on Education

As Wolf and Republicans traded jabs both behind closed doors and in the Pennsylvania media, Payne slowly but surely pressed on with his bill. It became a rather attractive alternative to conservative lawmakers who have promised their constituents they wouldn’t vote in favor of tax increases.

“Our caucus is stacked with members supporting anything other than higher taxes,” House GOP spokesman Stephen Miskin said in October.

Wolf wishes to increase pre-K-12 funding by $2 billion over the next four years and spend $141 million more on community and state colleges in 2016 alone. Wolf also wants to cut property taxes by $3.8 billion.

Online gambling in Pennsylvania is estimated to generate $120 million for Harrisburg in the first year thanks to licensing fees. Full market valuation could reach $700 million annually.

In mid-November, Payne’s committee voted 18-8 to move HB649 to the House chamber for continued deliberation. “We’ve been talking about needing additional revenue for five months, and this is a viable option,” Payne told reporters.

Another viable option is daily fantasy sports (DFS), Pennsylvania being one of the few states considering steps to regulate the budding market instead of simply declaring the contests illegal.

With growing competition from its southern border, specifically the Horseshoe Casino Baltimore, Pennsylvania is looking to protect its gaming interests while also developing new sources of tax revenues to fund critical programs.

“We are currently facing a projected $2 billion budget shortfall… This legislation is the first step toward ensuring future growth as the industry expands,” Payne insists.