Pennsylvanian legislators again mull online gambling legalisation

Tuesday saw the Pennsylvanian Legislature again considering online gambling legalisation (among other related matters) in a joint House and Senate hearing – the 84th in the last 2 years on this issue according to some observers, without reaching finality.

The witness list for the joint Senate Community, Economic and Recreational Development Committee and the House Gaming Oversight Committee was fair and balanced, and according to several reports in local media was largely positive from an online gambling viewpoint, with key issues like land casino cannibalisation and taxation addressed.

It was also a good indicator of possible opponents, particularly Sens. Lisa Boscola and Robert Tomlinson who appeared to have a largely negative attitude and represent state constituencies in which land operators against legalisation – Parx and Sheldon Adelson’s LVS Bethlehem casino – are situated.

Both appeared to be of the view that a tax rate for any legalised online gambling should be in excess of the proposed 14 percent, arguing that this would cause land punters to move online, damaging land casino tax revenue contributions.

Pennsylvanian legalisation proposals to date have required that online licensing be confined to existing state land operators.

Caesars Entertainment exec David Satz testified that the proposed lower online gambling tax rate would not adversely impact gaming companies as claimed by the senators; he explained that experience and documented research has shown that online gambling does not cannibalise land casino business, and in fact boosts the bottom line of land-based casinos, activating new customers and reactivating lapsed punters.

He also pointed out that online gambling has the potential to generate new revenue for the state – possibly by tens of millions over five years.

Anthony Ricci, CEO of Parx Casino argued for higher taxes on online gambling, saying the protection of land operators was a paramount concern.

On the more positive side, the executive director of the Pennsylvanian Gaming Control Board, Kevin O’Toole, testified that his regulatory body has the necessary capability and experience to properly regulate state-licensed online gambling.

O’Toole pointed to the positive development of neighbouring New Jersey’s online gaming sector as practical answers to some of the questions expressing concerns and fears.

O’Toole said that his Commission supports state lawmakers’ current attempts to legalise and licence online gambling under the supervision of his Commission, commenting:

“We believe that efficiencies can be achieved by using the experience of our employees and that we can adequately protect the public and the integrity of gaming in these areas.”

The Poker Players Alliance and Rep. George Dunbar (the author of a recent legalisation bill) told the committee that legalisation and proper state regulation is the way to go, accepting that online gambling without licensing or taxes is widespread in the state and should be controlled in the interests of consumer protection.

Adelson’s Coalition to Stop Internet Gambling predictably argued that legalisation will result in more problem gamblers and risk to minors, again ignoring the slew of empirical evidence to the contrary.

Several observers commented that the testimony and political tone of the hearing appeared in general positive for legalisation, and advised that a further hearing – the 85th – will take place on March 20.

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