Pennsylvania may be turning to online gambling to generate new revenue, but is it a smart bet? | News | Pittsburgh | Pittsburgh City Paper

Pennsylvania may be turning to online gambling to generate new revenue, but is it a smart bet?

"Most times, legal gambling is oversold by states and that can lead to disappointment."

With the state facing a multi-billion-dollar deficit and a proposed tax increase in Gov. Tom Wolf's first budget, Pennsylvania Rep. John Payne says he doesn't want to miss any opportunity to infuse dollars into the state's coffers.

That's why in February, Payne, a seven-term Republican legislator from Hershey who serves as the chairman of the house gaming oversight committee,  introduced legislation to legalize online gambling — from slots to poker to state-run fantasy sports leagues — in the state.

"I think now is as good a time as any," Payne says. "It's been up and running in New Jersey and Delaware for more than a year now and we have hard data to look at and examine.

"Maryland is looking at expanding, and there are casinos in Ohio and West Virginia that have an impact on our gaming revenues. My attitude as a businessman for 30 years has always been, you have to stay competitive. It's better to get this going now before everyone else does."

And he's not alone. In addition to Payne's measure, two other bills have been introduced in the house. One, from Republican state Rep. Nick Miccarelli of Delaware County, would legalize only online poker. Another, from Bucks County Democrat Tina Davis, is very similar to Payne's bill, but seeks a higher tax rate and licensing fee.

Neither Miccarelli nor Davis could be reached for comment for this story, but Payne tells City Paper that at a time when the state is in financial trouble, it doesn't make sense to leave any potential revenue on the table. Besides, he says, online gambling already exists in Pennsylvania.

"People talk about online gambling coming to Pennsylvania, but let me tell you, it's already here," Payne says. "People are making bets every day with companies located offshore somewhere. Why shouldn't we legalize it here, regulate it and, instead of the money being shipped to operators in some other country, it stays right here.

"And if we do it, we know it will be fair, and we know there will be safeguards in place to prevent things like underage gambling from occurring."

Mark Tevis, a casino-industry marketing consultant and CEO of the casino-tourism site, agrees that to not capitalize on Internet gambling as a way of generating revenue would be foolhardy, especially when other states are likely to get on board.

"This is a chance for Pennsylvania to be an innovator, not a follower," Tevis says. "I think you're going to see very serious discussions about this, this year because of the budget shortfalls that the state is facing. You have to find new revenues, and I think this would be much more preferred over new taxes."

But will an expansion to online gambling make a real financial difference in Pennsylvania? So far, revenues have fallen well short of predictions in New Jersey, Delaware and Nevada. Is it the revenue-generating panacea that some tout? Simply another form of entertainment? Or, just another way for Pennsylvanians to lose their money? Or, maybe, it's a bit of each, depending on expectations.

"The thing about legal gambling is, a third of the people are against gambling in any form; another third are mildly against legal gambling; and the final third are neutral. Except for casino operators and some lawmakers, no one is really pro-gambling," says I. Nelson Rose, a professor at Whittier Law School in Costa Mesa, Calif., and an expert on gambling issues. "What you end up with are people saying, 'Well, if people are going to gamble anyway, it's better that it's run by the government.' It's a revenue-generator. Legal gambling isn't about anything except politics and money.

"But, most times, legal gambling is oversold by states and that can lead to disappointment. The fact is, revenues from legal gambling will never be large enough to solve a social problem."

In December 2013, in an effort to cure its financial woes and help the town of Atlantic City, online gaming went live in New Jersey.

Republican Gov. Chris Christie, who had vetoed previous attempts at legalization, promised massive returns. His 2014 budget, in fact, estimated total online gaming revenues of $1 billion —providing a nearly $200 million influx of cash to the struggling state. It became quickly apparent, however, that those numbers would never be realized.