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Pennsylvania Online Gambling Study Proves Positive

Pennsylvania Online Gambling Study Proves PositiveA study regarding the feasibility of online gambling in Pennsylvania was released yesterday and by and large the results were positive.

Commissioned last year by the Pennsylvania Legislative Budget and Finance Committee, the research was undertaken to determine the possible benefits of launching an online gambling regime similar to that of its neighboring state of New Jersey. The study was conducted by Econsult Solutions of Philadelphia and the report’s release comes less than one week following an online gambling hearing before the Pennsylvania House Democratic Policy Committee.

A major concern of Keystone State officials, as well as those of other states also considering igaming legislation, is whether online gambling revenue would cannibalize that of land-based casino operations. Extensive research shows that cannibalization would not be a factor, with the study instead pointing out that Internet gambling may complement brick and mortar gambling.

The Current Condition and Future Viability of Casino Gaming in Pennsylvania found that online poker players may be more apt to visit casinos after becoming more comfortable playing online. This has been pointed out by advocates of online poker legislation in the past who extoll the virtues of marketing schemes in which online winners can compete in live poker tournaments held at casinos.

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With regard to revenue, estimates put first year totals at $184 million. Up to $307 million is possible in future years, with projections showing about 58% of that coming from online casino games and the remaining 42% from online poker. The study suggests that the first year projections may be on the low side and could be much higher if the gaming sites are marketed properly in a way that lends itself to growth.

Tax rates suggested in the report came to 20% for Internet poker and 60% for online slot action. However, competition with unregulated sites may force state officials to keep the rates lower initially, with hopes of eventually reaching the 20% and 60% amounts.

One negative aspect of the report had to do with the state of brick and mortar gambling in Pennsylvania. Keystone State casinos saw a collective decrease in revenue last year, the first time that has happened. The study indicated that more declines may be on the horizon considering that New York is preparing to open a handful of new casinos.

Ohio, Maryland and New Jersey were also mentioned as states that will draw gamblers in the future who currently patronize Pennsylvania casinos. Ironically, Pennsylvania successfully siphoned a number of New Jersey gamblers away from their home state in recent years and managed to take over the no. 2 position in terms of brick and mortar revenue in the entire nation, trailing only Nevada.

The Poker Players Alliance issued a press release following the study becoming available for public consumption. PPA executive director John Pappas, who testified last week during the Pennsylvania online gambling hearing, stated that the report seemingly changes the question of if the state will enact online gambling legislation to when.

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