Lawmakers Still Undecided After Pennsylvania's Second Hearing on Online Gambling

Published June 25, 2015 by Elana K

Lawmakers Still Undecided After Pennsylvania's Second Hearing on Online Gambling

The deadline to pass a law that would regulate Pennsylvania online gambling is five days away; a hearing that was held last week on the topic heard both positive and negative testimonies.

Last week the Pennsylvania Senate Community, Economic and Recreational Development Committee held a second hearing on a proposed bill that would regulate online gambling in the Keystone State. While Pennsylvania regulators expressed confidence that online gambling could, in fact, be regulated (which was one point of contention in the first hearing), concerns still remained about whether online gambling would take away players, and revenue, from land-based casinos.

Regulation of Online Gambling

Kevin O’Toole, Executive Director of the Pennsylvania Gaming Control Board, testified that “the board is confident that this activity [online gambling] can be effectively regulated.” He backed this up by citing that the state-of-the-art technology used in online gambling, including geolocation and age verification technology, is extremely effective.

However, he also said that it would take between 9-12 months for online casinos to be ready for players, once (and if) the regulation is passed.

What About the Money?

During the Q&A parts of the hearing, a number of lawmakers expressed concern over the impact of online gambling on the tax revenue from Pennsylvania’s land-based casinos. Especially because the proposed law would impose a lower tax rate on online casinos than land-based casinos, Senators are concerned that customers will favor online casinos over land-based casinos, which will ultimately result in a loss of revenue for the state .

However, the most recent and comprehensive study shows that online casinos, for example, Silver Oak Casino, does not detract from land-based casinos; rather, it complements them. The study is called “Consumer spending in the gaming industry: evidence of complementary demand in casino and online venues,” and was conducted by gambling experts Kahlil S. Philander, Brett Abarbanel and Toni Repetti.

The Clock is Ticking
The deadline for Pennsylvania’s budget and this bill is June 30th. Sen. Kim Ward, sponsor of the bill, said “she does not expect gaming legislation will be ready by June 30.” Which is unfortunate, given that if ten casinos would pay the government fees for being included in online regulation, Pennsylvania could take in a total of $260 million. And those are just the upfront fees.

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