Far-reaching gambling bill passes Pennsylvania House

Gov. Tom Wolf delivers his budget address for the 2017-18 fiscal year to a joint session of the Pennsylvania House and Senate in Harrisburg, Pa., Tuesday. Wolf asked lawmakers Tuesday to help fill a $3 billion projected deficit by imposing a tax on Marcellus Shale natural gas production and signing off on potentially touchy cuts in spending, including transportation aid to schools.
Gov. Tom Wolf delivers his budget address for the 2017-18 fiscal year to a joint session of the Pennsylvania House and Senate in Harrisburg, Pa., Tuesday. Wolf asked lawmakers Tuesday to help fill a $3 billion projected deficit by imposing a tax on Marcellus Shale natural gas production and signing off on potentially touchy cuts in spending, including transportation aid to schools. Matt Rourke — The Associated Press

Budget Highlights

A newly unveiled measure to expand casino-style gambling in Pennsylvania — already the nation’s No. 2 commercial casino state — is on the move in the Legislature in a bid to help the state government plug its biggest cash shortfall since the recession.

The heavily lobbied legislation emerged from behind closed doors Wednesday night as part of wider budget negotiations, after competing measures passed the House and Senate in the last five months. It involves a jumble of concepts that offer a combination of license fees and taxes on new gambling losses. The Senate passed it, 31-19. The measure requires approval by the House and Democratic Gov. Tom Wolf. Here is a look at some of the elements:

___

SATELLITE CASINOS

Each of Pennsylvania’s 10 larger casinos would be able to bid on a satellite casino license allowing up to 750 slot machines and 30 table games at a facility that is not within 25 miles of another casino. Bidding starts at $7.5 million, with a table games certificate costing an extra $2.5 million. License fees and taxes on gambling at the sites would go into the treasuries of local and state governments, as well public schools and economic and civic development projects.

___

GAMBLING AT TRUCK STOPS

Qualifying truck stops could operate up to five slot machine-style video gambling terminals. The revenue would be split between the state, the license holder, terminal operators and host counties and municipalities.

___

ONLINE GAMBLING

Licensed commercial casinos, both in Pennsylvania and beyond, can apply to the Pennsylvania Gaming Control Board to operate casino-style gambling on websites and mobile applications to people in Pennsylvania. A license fee of up to $10 million would be necessary to operate a website. Gross revenue from gambling on online slot machine-style games would be taxed at a 52 percent rate, while online table game revenue would be taxed at 14 percent. Just three states — New Jersey, Delaware and Nevada — allow online casino gambling.

___

LOTTERY

The Pennsylvania Lottery would be able to offer keno and feature online games, including its existing games, instant tickets and raffle games. The proceeds would go into the state Lottery Fund, which subsidizes programs for the elderly. The lottery would be prohibited from operating casino-style games online, such as poker, roulette, slot machines and blackjack. Four states — Georgia, Illinois, Kentucky and Michigan — allow online lottery play, according to the National Conference of State Legislatures.

___

LOCAL SHARE

Casinos would be required to pay millions of dollars annually to their host communities, reinstating a mandate struck down by the state Supreme Court last year because it treated casinos differently. The requirement had meant about $140 million that Pennsylvania’s casinos pay annually to local government budgets, institutions and projects in Philadelphia and 11 counties.

___

AIRPORT GAMBLING

Casinos could seek approval to operate an interactive gambling parlor at an international or regional airport in Pennsylvania, with an agreement from the airport authority. The machines would be accessible only to ticketed passengers and license fees would be required. Eligible airports are: Philadelphia; Pittsburgh; Erie; Wilkes-Barre/Scranton; Lehigh Valley; Harrisburg; Arnold Palmer Regional Airport; and University Park Airport in State College. Taxes on airport gambling revenue would go to the state and local governments.

___

FANTASY SPORTS

Daily fantasy sports betting in Pennsylvania would become regulated and taxed in Pennsylvania. Fantasy sports operators would have to pay a $50,000 license fee and a 15 percent tax based on in-state participation. Applicants would have to verify that players are at least 18.

___

SPORTS BETTING

Casinos could apply to the Pennsylvania Gaming Control Board to offer sports betting at the casino or online, should it become legal under federal law or under a federal court ruling. A license would be $10 million.

___

RESORT CASINOS

Resort casinos — Valley Forge Casino in suburban Philadelphia and Lady Luck Casino Nemacolin in southwestern Pennsylvania — can pay a $1 million fee to be relieved from requirements in the original 2004 casino law that gamblers must also take part in other amenities at the establishment.

___

CASINO OWNERSHIP

A 2004 provision limiting ownership of casinos to no more than one controlling stake in one casino would be repealed.

___

Source: Pennsylvania Senate Republicans.

HARRISBURG, Pa. >> The biggest gambling expansion in Pennsylvania since it first authorized casinos more than a decade ago cleared the last hurdle Thursday to get to Gov. Tom Wolf’s desk, where it awaited an uncertain fate.

The bill, a couple years in the making, emerged Wednesday evening, and won quick passage in the Legislature, despite opponents’ protests that they barely had a chance to read it, warnings that it carried unforeseen consequences and complaints that it was packed with sweetheart deals.

The Republican-controlled House of Representatives voted Thursday, 109-72, with support from Republican and Democratic leaders.

Wolf, a Democrat, will work in the next few days to evaluate and make a decision on the gambling legislation, his office said Thursday.

Advertisement

The plan would expand casino-style gambling to truck stops, online portals, airports and 10 new mini-casino sites.

It would make Pennsylvania the first state to allow both casino and lottery games online, in a quest for money from new and younger players. It also would pave the way for the struggling Pennsylvania Lottery — which funds programs for the elderly — to begin offering keno.

The bill was part of a broader package to break a four-month budget stalemate over how to stitch together Pennsylvania’s deficit-riddled finances.

Lawmakers hope to squeeze another $200 million a year or more from casino license fees and taxes on gambling losses. New gambling cash would also flow to decade-old property tax rebates and local government treasuries, institutions and development projects.

Pennsylvania is already the nation’s No. 2 commercial casino state, netting $1.4 billion in taxes from the industry in the most recent fiscal year.

New Jersey, which has the nation-leading internet gambling market, would welcome the expansion of player pools and prizes, if it reaches a reciprocal agreement with Pennsylvania gambling regulators.

The expansion of casino sites throughout Pennsylvania, however, could further damage Atlantic City’s casinos, whose loss of five of its 12 casinos began when Pennsylvania casinos started opening in 2006.

Opponents warn that the measure will cause an “explosion” of gambling.

“We will become a gambling state without parallel,” said Rep. Steve McCarter, D-Montgomery.

It also drew complaints from lawmakers that they had had little opportunity to understand the implications of the complicated, 470-page bill and that it is packed with pet provisions for certain casinos or lawmakers.

Rep. Margo Davidson, D-Delaware, called it “corporate welfare for casinos and special carve outs for special people.”

For instance, one provision that would repeal a long-standing limit on casino ownership in Pennsylvania could moot a lawsuit that has held up construction of the Live! Hotel & Casino in Philadelphia for nearly three years.

Another provision would protect much of northeastern Pennsylvania around Mount Airy Casino Resort — founded by billionaire Louis DeNaples — from the construction of a mini-casino that could potentially compete for gamblers. Delaware County would get greater control over a portion of the taxes from Harrah’s Philadelphia Casino that goes toward area development projects.

Yet another provision would effectively direct an extra pot of cash to counties with lower performing casinos this year.

The provision allowing truck stops to operate up to five slot-machine-style machines, called video gaming terminals, caught the attention of House Gaming Oversight Committee Chairman Scott Petri, R-Bucks. He said the bill carried a raft of unintended consequences, including a definition of truck stops that is “so broad, anything you think of as a convenience store is a truck stop.”

“You literally could drive a truck through the definition and its ability to be misused,” he said.

Pennsylvania-headquartered Penn National said it will consider suing over the gambling package, if it becomes law, because of the “uniquely punitive impact” on the Hollywood Casino it owns in suburban Harrisburg.

That prompted Rep. Mark Rozzi, D-Berks, to question why Mount Airy Casino would get special protection from the competition of a new mini-casino, but Hollywood Casino would not.

The bill would allow each of Pennsylvania’s casinos to bid on a mini-casino license allowing up to 750 slot machines and 30 table games. Bidding would start at $7.5 million, with a table games certificate costing an extra $2.5 million.

It would also restore a requirement that casinos pay roughly $140 million annually to their host communities, a mandate struck down by the state Supreme Court last year because it treated casinos differently.

This story corrects the party identifier of Rep. Steve McCarter to show that he is a Democrat.

Associated Press reporter Wayne Parry in Atlantic City, New Jersey, contributed to this report.

Subscribe to Home Delivery for only $2.50 per week!