Pennsylvania horse racing exec against legalised online gambling

In a letter to the editor of Penn Live this week, the president of the Pennsylvania Horsemen’s Benevolent and Protective Association, Tim Shea, claims that the recent introduction of SB900, a Pennsylvania state Senate proposal to regulate and licence intrastate online gambling, constitutes a threat to his industry and the state’s land casino businesses.

In support of his claim that online gambling cannibalises land casino business, Shea quotes from a study by Kahlil S. Philander of the University of Nevada in Las Vegas which in summary claims:

“This study therefore provides some evidence that in an online gaming market characterized by loose regulation, and relatively easy access, online gaming will cannibalize some commercial casino revenue at a rate of 27 to 30 cents on the dollar.”

However, the study adds a rider: “Despite the robustness of the findings across different models in this study, the short history of online gaming led to a fairly small data set. Therefore, some caution should be exercised when using these results in decision making processes.”

Access Philander’s research here:

http://digitalscholarship.unlv.edu/cgi/viewcontent.cgi?article=1020&context=grrj

Shea writes: “A recent study published in the University of Nevada Las Vegas Gaming Research and Review Journal found that Internet gaming cannibalizes commercial casino revenues by 27 to 30 percent. In Pennsylvania, this would have a devastating impact.”

But these estimates fly in the face of the empirical findings of a number of senior land gambling executives who have independently over the past year or more asserted that in their experience online gambling attracts a different demographic, and complements rather than detracts from land casino activity.

Shea explains his association’s interest in the issue, writing:

“Since Pennsylvania expanded gaming in 2004, racetrack casinos have designated slots revenue to the Race Horse Development Fund, leading to important growth in our horse racing industry without relying on a single taxpayer dollar.

“That growth has benefited countless farmers who sell materials necessary for horse racing. According to the Pennsylvania Gaming Control Board, horse owners and trainers reinvested approximately 89 percent, or $210 million, of monies paid from the Race Horse Development Fund into their local economies.

“As currently written, Senate Bill 900 would allow Internet gaming to bypass this fund, which would damage much of the progress made since 2004, when expanded gaming was designed to rescue Pennsylvania’s horse racing industry.”

Is Shea flying a kite that a new internet gambling state-regulated regime should include a cut for his association? Perhaps; “Internet gaming has its place, but it shouldn’t hurt Pennsylvania farmers and working families,” he concludes.

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