PA Revenue Package Crashes, Leaves Gaming Up in the Air

October 13, 2017
deflated hot air balloon

The Pennsylvania House took online gambling off the table again after a revenue package meant to fund the state’s budget stalled, thanks to the state hotel tax.

Increasing this tax effectively kept the state government from conclusively producing a package that could fund the over $2 billion shortfall in the budget, reported Online Poker Report.

Gov. Tom Wolf blamed the House Republicans for inaction, and said that his office would do all he could to avoid repercussions, given the state can’t pay for its budget this year.

“Wolf’s announcement seemed to mark an end to months of budget wrangling, along with massive casino-style gambling plans being floated in hopes of squeezing tens of millions of dollars more in casino license fees and gambling losses,” the Associated Press reported.

The main takeaways

  • All signs pointed to a positive outcome come Wednesday morning. Reversing this progress could mean a hold on a gaming package through Oct. 16 or into 2018.
  • House Republicans and Democrats could not come to a consensus on the Marcellus Shale severance tax, a tax on the state’s natural gas production shale wells.
  • Wolf plans to raise money with the state’s liquor system.
  • Lawmakers still would like to find a way to fund the budget with recurring revenue, leaving gaming a possible candidate.
  • Lawmakers could still have a gaming package in the works. This would include online gambling, video gaming terminals (VGTs), and satellite casinos.

Solving other problems first

According to Online Poker Report, Wolf’s plan to use the Pennsylvania Liquor Control Board (PLCB) revenue would take two months, at the least, to securitize the PLCB. Even more than that, there are still state issues.

Higher education’s nearly $600 million in subsidies remain at risk. Lawmakers have yet to set aside money for higher education. They instead are focusing on the current year’s budget.

The state still needs to find a way to increase its cash flow to pull itself out of debt. If the lawmakers come to a larger agreement about the revenue plan, that could also include gaming.

“If at any point in time they (the House) come up with a budget that passes muster with the Senate and that I can sign on to, yeah, I will move to that because that’s going to give me the revenues that I need to make sure that all these things are protected,” Wolf said in his press conference on the budget.

Making a deal that includes online gambling and poker in the state would generate a large cash flow. Each state license is $10 million.

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