Another Potential Spanner in the Works for PA iGaming

PennsylvaniaIf the situation in Pennsylvania was not confused already, a new interest group is pushing for the legalization of video poker machines in bars and clubs.

For more than thirty years, veterans groups in Pennsylvania have been seeking the legalization of video poker machines in bars and clubs. An estimated 40,000 machines exist throughout the state but, outside of casinos, the machines are being operated illegally.

Opposition to the legalization of video poker machines has generally come from lawmakers opposed to the expansion of gambling and from casinos concerned about the impact legalization would have on their brick and mortar revenues.

However – just like online gambling – video poker is already a popular pastime in Pennsylvania and the machines continue to attract thousands of players each year. Now a new interest group has been set up to lobby for legalization, claiming that regulation would help fill gaps in the state budget.

Regulation Could Raise $300 Million per Year

The claim that regulation could raise $300 million per year in tax revenues was made by Andy Goodman – the government affairs spokesperson for the recently-formed Pennsylvania Video Gaming Association. Goodman based his claim on an existing program in Illinois, where approximately 22,000 machines generated $228 million in tax revenues in 2015.

Goodman says that video poker is an “already present industry” and, although illegal, should be regulated to “protect consumers and generate tax revenue”. He also announced that the Association is drafting proposals similar to the Illinois legislation, and that it will be ready for submission before mid-year. Goodman claims that the Association´s proposals will also create hundreds of jobs.

The proposals have the support of State Senator Lisa Boscola – the Democratic Senator covering the area in which the Sands Bethlehem Casino is located. Senator Boscola – an opponent of online gambling – claims that video poker attracts a different clientele than brick and mortar casinos, and there is no reason why the two sides could not work side by side successfully.

How Does Video Poker Legislation Affect Online Gambling?

The proposals to legalize video poker machines could have a positive or negative impact on the movement to regulate online gambling in Pennsylvania. Should the state adopt measures to legalize video poker machines, the revenues generated would allow for a relaxation of the proposed 25% tax rate on Gross Gaming Revenues – a factor that would bring online poker back into the mix.

However, the Pennsylvania Video Gaming Association and Senator Boscola are opposed to the regulation of online gambling. Senator Boscola has previously raised concerns that the regulation of online gambling in Pennsylvania will lead to an increase in gambling addiction. She is also concerned that regulation will prevent a $40 million expansion of the Sands Bethlehem Casino from going ahead.

Both the Association and Senator Boscola see the proposals as an alternative to the regulation of online gambling in Pennsylvania. Boscola told that the pastime was fun, spirited and harmless. “Video poker is happening at a lot of bars right now”, she said. “Ultimately, it´s time to apply common sense to gambling. Let´s put that common sense, harmless fun into law”.

Why Another Potential Spanner in the Works for PA iGaming?

On the face of it, the legalization of video poker machines make a lot of sense. As an alternative to the regulation of online gambling in Pennsylvania, it would fill the hole in the state budget, eliminate concerns about the perceived risks of online gambling, and avoid the bickering about who should be allowed a license to operate an online gambling brand in Pennsylvania.

If the prevalence of video poker machines is already as high as is claimed by the Pennsylvania Video Gaming Association, the casinos´ claims of cannibalization would be unjustified. In order to bring the casinos on board with the proposals, there are a couple of options the Association could consider in its proposals:

  • Limiting the maximum stake for machines in bars and clubs to a figure below what can be gambled in brick and mortar casinos.
  • Using some of the revenues generated by regulation to replace the “[geolink href=””]local share tax[/geolink]” – a $10 million levy on slot machine revenues.

As Senator Boscola said, all it takes is a little common sense.

Jacqueline Packett
Jacqueline Packett