Pennsylvania is on the verge of becoming the fourth US state to officially legalize and regulate gambling following the approval of a compromise budget deal today by the Keystone State’s House of Representatives today. That budget bill, H 271 (House Bill 271), includes a framework for regulating several forms of online gambling, including online poker, online casino games and daily fantasy sports (DFS).
The bill was originally approved by the Pennsylvania House earlier this week, and the state’s Senate approved an amended version of the bill yesterday. Today’s affirming approval of the Senate-amended version of the bill moves the compromise measure on to the desk of PA Governor Tom Wolf, who is expected to sign H 271 into law.
With the expected signing by Wolf, Pennsylvania will become the fourth US state to legalize online poker, joining neighbors Delaware and New Jersey and the first US state to do, Nevada. Those other three states have already entered into interstate compacts allowing online poker players from those jurisdictions to play each other, so it’s a strong possibility that Pennsylvania could make a similar deal down the road.
For now, though, it’ll be a case of learning to walk before one can run. No live date has been set — it isn’t even signed into law yet — but the first regulated online poker play in Pennsylvania should occur sometime in mid- or late 2018. Pennsylvania’s resident and in-state visitors will also have the option to play casino games online, joining New Jersey and Delaware in that regard. Nevada, by contrast, has approved only online poker as of now.
The H 271 measure represents a broad expansion of gambling in the state, and it was intertwined in a bitter and partisan budget battle. Previous versions of the state’s constitutionally-required balanced budget had called for revenue from online gambling to be included, but had omitted the regulatory specifics, leaving gaping holes in the state’s annual budgets. The revenue from online gambling is expected to cover about 10% of projected budget gaps, making it a significant (but not primary) element. A similar situation loomed this year until this week’s deal was reached.
That broad expansion of gambling in the state also includes the aforementioned approval of daily fantasy sports, which had operated in a grey area before this, without generating tax revenue for the state. Tablet-based online gambling will also be allowed in certain of the state’s airports, in specially designated areas. Video gaming terminals, a pro-gambling faction in Pennsylvania which had helped stymie previous online-gambling efforts in Pennsylvania, also received a bone: VGT play will be legalized at the state’s “qualified” truck stops.
The online sale of the state’s lottery offerings was also included in H 271, to no one’s surprise.
As for the online-gambling licensing, the first licenses are to be offered to Pennsylvania’s licensed land-based casinos, at an original application price of $10 million each. Pennsyvania has 12 such land-based casinos, including the Sands Bethlehem property owned and operated by Sheldon Adelson and his Las Vegas Sands Corp., who have been fanatic foes of any gambling expansion online. It’ll be interesting to see if Sands Bethlehem offers an online product in Pennsylvania when the licenses become available; the duplicitous Adelson has allowed his Nevada company, Las Vegas Sands, to offer an online sports-betting application in direct and hypocritical contrast to his own stated “moral” objections. (Adelson really believes that online-gambling offerings will enrich his market competitors more than him, thus hurting him financially.)
The H 271 bill includes a kicker: The existing land-based casinos get first dibs on the fixed number of online licenses the state will authorize, but the state reserves the right to offer leftover licenses to other entities. It’s a joyous slap at the heinous Adelson, who had purchased a small number of politicians in districts surrounding the Sands Bethlehem casino in an attempt to block any online-gambling regulatory bills. Adelson also previously funded some shady marketing campaigns in the state designed to serve the purpose. The Pennsylvania passage and likely signing of H 271 means that Adelson is likely to redouble his well-funded financing of a RAWA-style bill at the federal level.
The pending approval of online gambling by Pennsylvania may well represent a tipping point in the US legalization battle. Pennsylvania will be, by far, the most populous state to date to approve and regulate onlin gaming. The state’s approval also makes it far more likely that its even more populous neighbor, New Yowk, will move forward in similar fashion. A New York approval would certainly energize Illinois and probably Massachusetts to follow suit, thus triggering the long-awaited “second wave” of US online-gambling expansion.
We’ll have more on this story as it develops.
