Video gambling terminals or “VGTs” will be excluded from the Pennsylvania omnibus gambling bill, according to Senate President Pro Tempore Joe Scarnati, R-Jefferson. Scarnati predicts a vote on the gambling bill in the coming days.
The current version of the bill includes online gambling, daily fantasy sports, online lottery ticket sales, mobile tablet gaming in major airports, and the local share taxes. VGT gambling, which was part of a House Bill passed last month (and left out of the Senate Bill), is no longer being debated, according to Speaker Scarnati.
Online Casino and Poker Legislation
In a few days, it looks like Pennsylvania will become the fourth U.S. state to legalize online gambling. Legalized online poker and casinos would generate an estimated $120 million in its first year of implimentation. By its fifth year, the iGaming market should generate around $450 million a year.
The Senate Bill set the tax rate at 54% for online casinos and 16% for online poker rooms. The House Bill set the tax rate at 16% across the board. It is unknown whether the Senate or House tax rate for online casinos will emerge as the preferred plan, though a compromise in-between the two taxation rates is likely.
Mike Turzai on Budget Differences
GOP House Speaker Mike Turzai of Allegheny County said the Republican-controlled legislature still has no with Democrat Governor Tom Wolf. A $2.2 billion budget impasse continues in the state’s $32 billion, two-year budget. Turzai says that the gambling package is the main point of contention.
Speaker Turzai says that the bill is not as large as $2.2 billion, so he wants to raise cash from increasing alcohol taxes from more wine and liquor licenses, revenues from expanded gambling, the tobacco settlement, and other “sin taxes”. Senate Republicans led by Joe Scarnati want to borrow the money to cover the budget overlay, while Gov. Wolf wants a package include gambling revenues and a $1 billion tax increase.
Calls to increase the Marcellus Shale Tax were ignored. Gov. Wolf’s 6.5 percent severance tax proposal was fought off by Republican lawmakers, who have sheltered the shale industry for the past 10 years. His plan to bring in an additional $95 million a year in taxes from a $12 minimum wage law also were parried.
Pennsylvania Daily Fantasy Sports
If Joe Scarnati’s version of events is right, then Pennsylvania will become the 12th U.S. state to legalize and regulate daily fantasy sports. Compared to online gambling, DFS gaming is going to be a minor generator of revenues. John Pappas of the Poker Players Alliance (PPA) estimated that daily fantasy sports would generate $5 million a year for the state.
Mobile Gaming in Airport Terminals
Pennsylvania’s biggest airports will have the right to offer real money tablet computer gambling in their terminals. Republican State Rep. Jason Ortitay introduced the airport tablet gambing in House Bill 271 earlier this year, but it should be included in the omnibus gambling bill.
The airport bill called for tablet gaming in Pennsylvania’s international airports in Philadelphia, Pittsburgh, Erie, Harrisburg, Wilkes-Barre/Scranton, and Lehigh Valley. Arnold Palmer Regional Airport in Latrobe (33 miles from Pittsburgh) later was added to the list. The bill failed in the House in March 2017, but should be added. It is expected to generate between $5 million and $12 million in taxes per year.
VGTs Excluded from Gambling Bill
Still, it is the news that the video gambling terminals will be excluded that is the big news. The VGT clauses appeared to be one of the biggest stumbling blocks. Pennsylvania casinos and racinos lobbied against the VGTs, saying they would cannibalize revenues from slot machines in the states. Las Vegas Sands Corp, owners of the largest casino in the state, funded a political action committee (Republicans For Responsible Government) which attacked the VGT bill.
The Pennsylvania Tavern Association supported the bill, which would have placed at least 35,000 additional gaming machines in the state. Those EGMs would have gone into taverns, restaurants, and other small businesses. Pennsylvanians For Responsible Government’s attack ads suggested the VGTs would be placed in laundrymats and nursing homes.
Confirmation that VGTs out on Saturday
In an update of Friday’s story, Saturday brought confirmation that VGTs are out of the 2018 Pennsylvania Appropriations Bill. That was the definite speculation throughout the latter part of the week, but those rumors were confirmed after the Saturday deliberations.
Senate Appropriations Chairman Pat Browne (R-Lehigh County), referring to the VGT legislation, said after the Saturday negotiation sessions, “That is no longer part of the conversation here.”
