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Pennsylvania took a major step towards expanding gambling in the state with the House of Representatives passing the HB 271 bill late last week. The HB 271 brings in sweeping changes to existing gaming laws permitting video slots gaming in places like airports and bars, as well as legalizing online gambling and daily fantasy sports.
This is the first time that gambling is being expanded so extensively since it was first legalized in 2004. The bill is an attempt by the legislators to raise much-needed revenue to bridge the $3 billion budget deficit without raising taxes. The bill will enable a liquor license holder such as a bowling alley, club, truck stop or bar to operate slot machine-type of gaming machines called video gaming terminals (VGTs). A limit of 5 machines per location has been imposed though truck stops are allowed to have 10.
The House further expanded the bill’s scope by adding a provision that will allow nearly 40,000 video gaming terminals to be set up in liquor establishments, something which wasn’t present in the version cleared by the Senate. Industry observers expect the addition to face significant opposition in the Senate.
If the bill is passed, around 7,000 to 8,000 such establishments are expected to host gaming terminals in the state. Tax revenue collected from them will be sent towards the state, the lottery as well as local governments. House Majority Leader Dave Reed noted that it was an important step to achieve before the budget negotiations begin. Legislators are concerned the only other option to increase state revenue is increasing personal taxes.
The Senate version of the bill will bring in revenues between $109 million and $147 million while the House version could result in revenues between $250 million and $300 million. It is still unclear if Gov. Tom Wolf will support the bill. Supporters of the bill say that the expansion will benefit local governments, tavern and bar owners, as well as several non-profit organizations.
Opponents however have raised concerns that it might give rise to issues such as increased crime and gambling addiction. Some legislators have warned that gambling locations would come up near churches, schools or day care centers. Scott Petri, chairman of the House Gaming Oversight Committee has warned that the bill was being rushed through too quickly.
While the casino industry have expressed support for the legalization of internet gaming they have also expressed concern that the new gaming model could threaten the revenue of brick & mortar casinos in the state.
