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Pennsylvania Eyes Online Gambling

State senator says he plans to introduce a bill

Even though plans are in the works to introduce bills to legalize intrastate online gambling in Pennsylvania, a recent hearing on the issue showed widely divided opinions in the state, including substantial opposition.

Legislators in both the Pennsylvania House and the Senate have said they plan on introducing a bill that would legalize online poker in the state in the coming weeks. But judging from the back-and-forth testimony at a hearing on online gambling before the Senate Community, Economic and Recreational Development Committee, that legislation passing quickly hardly seems like a sure thing.

William Ryan, chairman of the Pennsylvania Gaming Control Board, injected a note of caution into the debate by saying that legislators should be wary of large revenue projections for online gambling.

Econsult Solutions—which conducted a state study on the Pennsylvania gambling industry—estimates online gambling would bring in $68 million in tax revenue for the state in the first year and $110 million in subsequent years.

But Ryan cited the example of neighboring New Jersey, which began online gambling in November. Revenue from New Jersey’s online sites has been well below projections made before gambling went live in the state, and taxes collected by New Jersey are only a slight fraction of initial projections.

“It would seem to me, from what we are observing, that intrastate iGaming will never be big,” Ryan said. “The way it looks now, it doesn’t look like it’s going to approach the bricks-and-mortar casinos. It’s just not there.”

Several state legislators also questioned whether online gaming would truly have a significant impact on the state’s budget.

Ryan said Pennsylvania would need time to implement online gambling and warned against rushing the process, saying it could take a full year. Several legislators pointed out that such a timetable means online gaming can’t help this year’s state budget.

Casino operators in the state also warned against Pennsylvania setting too high a tax rate on online revenue and a desire to be the only operators eligible for online gaming licenses in the state.

But not all casino operators are in favor of online gambling—at least not right away.

Wendy Hamilton, general manager of Philadelphia’s SugarHouse Casino, said the state should “proceed with caution” when considering online gaming, and suggested the state should wait a year to see how online gaming evolves in the three states that currently allow it—New Jersey, Nevada and Delaware.