Lawmakers could consider online gaming in Pennsylvania

Online gambling could generate another US$ 307 million a year in gambling revenue in Pennsylvania, according to a report by Econsult Solutions of Philadelphia released Wednesday, an estimate that assumes that the state hits its goals and avoids the experience of New Jersey, which has fallen short of revenue expectations.

Senators commissioned a report in December to assess Pennsylvania’s existing gambling landscape of 12 casinos and analyze the potential impact of online gambling at the casinos. With the state government facing a US$ 1 billion gap in Governor Tom Corbett’s budget plan, the report is expected to spark serious discussion about legalizing and taxing online gambling in the next two months.

Senate Majority Leader Dominic Pileggi said he had not taken a position on whether to legalize online gambling. But, he said, members of the Legislature are interested in it and it “deserves a serious look.”

In a statement, Senate President Pro Tempore Joe Scarnati was more emphatic, saying “authorization of online gambling in the state will be explored.” Econsult was asked to assume that any online gambling in Pennsylvania would occur through the state’s existing casinos. The extent to which online gambling would simply take away the customers who gamble at the casinos is small, Econsult said.

One reason for that is online gambling typically allows smaller bets and caters to younger gamblers, suggesting that it would attract new gamblers and creating a new pool of people to attract to casinos, Econsult said. The consultant did say, however, that studies on the relationship between online and offline gambling are extremely limited.

Bipartisan legislation introduced in Congress would ban online gambling, although the bills’ prospects are not clear. The measures are aimed at reversing a 2011 decision by U.S. Attorney General Eric Holder that a 1961 law used in recent years to curb Internet gambling only barred sports betting. As a result of the decision, New Jersey, Delaware and Nevada have allowed online gambling.

Meanwhile, legislation to legalize online gambling has been introduced in at least eight states, including Pennsylvania, according to information from the National Conference on State Legislatures. In March, Morgan Stanley forecast that a U.S. online gambling market would be worth US$ 8 billion in revenue by 2020.

Pennsylvania state Senator Kim Ward, who chairs the Senate Community, Economic and Recreational Development Committee, appears to have found positive content in the recent Econsult report on the potential for legalised online gambling, and plans to hold a hearing in her committee to discuss the study – probably early in June.

Ward said Wednesday that she has invited representatives of the Pennsylvania Gaming Control Board, the Department of Revenue and land-based casino operators to the discussion. The senator commented that the study has influenced her personal view of legalisation from neutral to supportive of the concept, provided it is strictly regulated and policed. The Econsult study had addressed all of her concerns on the potential for legalised online gambling as a possible source for further state revenue collection, she said.

The House Democratic Policy Committee in Pennsylvania held a generally positive hearing on e-gaming last week.

The fledgling Internet gambling industry is growing, but not as fast as many had hoped. New Jersey Governor Chris Christie initially estimated it would bring in $1 billion in its first year, but his state treasurer recently acknowledged the numbers are coming up far short of that estimate. Wall Street analysts expect online betting to bring in about $200 million in its first year in New Jersey.