HARRISBURG, Pa. (CBS/AP) — Gov. Tom Wolf says he has signed bills that would authorize major borrowing and a broad expansion of gambling in Pennsylvania to fully fund the state budget.
One bill authorizes internet gaming, as well as mini-casinos and slots-like video gaming terminals at truck stops and airports. Wolf says there has been a lot of pressure to expand gaming, and cites the need for the recurring revenues it will raise.
“The goal all along has been to do what’s prudent, not cannibalize existing gambling revenues coming to the state,” Wolf said. “And I think what we’re settling on will actually do that.”
Under the measure, the state will become the fourth to allow offer online gambling, joining Nevada, New Jersey and Delaware. It also makes Pennsylvania the first state to allow online play for both commercial casinos and its state lottery, as both go in search of newer and younger players.
Wolf, a Democrat, had not been enthusiastic about expanding gambling, but he entertained the idea in dealings with a Republican-controlled Legislature that saw it as a better option to balance the state’s persistent deficits than a tax increase.
While lawmakers also saw a gambling expansion as a way to bring tax revenue to their districts and pet projects, Wolf had focused on ensuring a gambling expansion would not damage the state’s existing tax collections from casino revenues or receipts from the struggling Pennsylvania Lottery.
“There’s been a lot of pressure from a lot of places in the commonwealth to actually expand this and we do need some recurring revenue,” Wolf told reporters Monday. “Again, the goal has been all along to do what’s prudent, not cannibalize existing gambling revenue coming to the state, and I think what we’re settling on will actually do that.”
In addition to online play, the new law will allow the state to be peppered with games of chance.
Ten of the state’s 12 existing casinos will be able to bid on a license for a new, smaller casino with hundreds of slot machines. Bidding would start at $7.5 million, with a table games certificate costing an extra $2.5 million, for a casino limited to 750 slots and 30 table games. Currently, the state’s larger casinos can operate up to 5,000 slot machines.
Meanwhile, casinos will be able to offer interactive gambling parlors in eight airports, including Pittsburgh and Philadelphia, while qualifying truck stops can operate up to five slot machine-style monitors called video gaming terminals. Only Nevada and Puerto Rico currently allow airport gambling.
Lawmakers expect the gambling legislation to produce about $200 million or more annually from casino license fees and taxes on higher gambling losses.
Pennsylvania casinos rake in more gross revenues than any other state except Nevada, according to figures from the American Gaming Association. But Pennsylvania is the No. 1 state in tax revenue from the casino industry, netting $1.4 billion in the most recent fiscal year. Pennsylvania’s lottery is also one of the nation’s biggest, delivering $1 billion in profits on $4 billion in sales, though its revenue has flattened.
The bill, a couple years in the making, emerged last week and won passage within 18 hours in both chambers of 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 for casinos and certain lawmakers’ pet projects.
For instance, a provision that would repeal a long-standing limit on casino ownership in Pennsylvania could make moot a lawsuit that has held up construction of the Live! Hotel & Casino in Philadelphia.
The governor has also signed a bill to authorize $1.5 billion of borrowing against future tobacco settlement payments, but Wolf also says he remains committed to his own plan to borrow $1.25 billion against future liquor system revenues. He’s not indicating for now how he will reconcile that.
The governor is also indicating reservations about signing the public school code, another budget companion bill.
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