Budget Crisis In PA Keeps Online Gambling Hopes Alive

July 30, 2017
candle burning in darkness

The Pennyslvania gambling expansion package is now an integral part of the state Senate’s budget solution.

This week the Senate convened to pass a measure to address the $2 billion shortfall in the $32 billion budget. One component of that measure is $200 million marked as tax revenue from gambling expansion. In order to meet that number, the state would almost certainly need to include online gambling in the expansion.

House now has to get on board with budget plan

The inclusion in the Senate budget plan is good news for iGaming. It is no guarantee the legislature will pass the measure though. First of all, this is something lawmakers did last year too. The budget earmarked $100 million for gambling expansion last year only to never pass a bill.

This is exactly the kind of decisions that got Pennsylvania into the budgetary hole it is in. So, this year, in addition to needing to balance the budget, the state is also facing outside pressure from S & P Global Ratings. The group is threatening to downgrade the state’s credit rating if it does not get its act together on the budget.

One might think then that this should be a no-brainer decision. Unfortunately, politics are in the way. Members of the House are rumored to not be budging on the inclusions of video gambling terminals (VGTs). That is why there is no compromise on the two versions of the gambling expansion bills weeks after they passed.

Now the House needs to sign off on the Senate package. The House Republicans are strongly against new taxation to balance the budget, which are part of the Senate package.

Online gambling might not happen until the fall

With all of the pressure on passing the budget, online gambling is in the mix, but on the sidelines. Technically the legislature does not recess for the year until the end of November. So, the focus right now is on a budget plan. The actual means to generate that budget is on the back burner.

Another reason online gambling might be stalled is that the Senate and Gov. Tom Wolf, who approves of the Senate plan, are using it as an incentive for the House to pass the budget. If the House is willing to pass a budget with tax hikes, perhaps the Senate will give in on some elements of gambling expansion.

The biggest worry is that VGTs are something neither side is willing to budge on. If that is the case, it could be 2016 all over again with gambling expansion in the budget, but no gambling expansion in Pennsylvania.

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