PPA’s John Pappas Writes Online Poker Op-Ed for Philly.com

The Pennsylvania legislature was a total mess in 2016, arguing for months and months about how to balance the state’s budget. For a long time, it looked like online gambling would be legalized and regulated to fill a $100 million budget gap, but it never happened. It looks like there might be another run at it this year, but when it comes to gambling and lawmakers, nothing can be certain. On Monday, Poker Players Alliance executive director John Pappas penned an op-ed for Philly.com to explain why now is the time to get it done.

He started out by putting a little fear into the readers:

Unless you were looking closely, you probably missed the recent news that gambling revenue in Atlantic City increased last year for the first time in a decade.

According to the chairman of the New Jersey Casino Control Commission, current operators increased revenue from slots and table games by 2.1 percent, while online gaming revenues shot up by 32.1 percent – accounting for nearly $200 million just from online.

The news should be a wake-up call to Pennsylvania legislators concerned about a more than $600 million budget shortfall and the long-term competitiveness of the commonwealth’s gaming industry. It should also put the final nail in the coffin for the repeatedly debunked argument that somehow online gaming will cannibalize brick-and-mortar casinos. It doesn’t. End of story.

Pennsylvania’s gambling industry has exploded in the last decade – the state now has a dozen casinos – making Pennsylvania one of the biggest gambling states in the country. At the same time, New Jersey’s famed brick-and-mortar gambling industry – restricted to Atlantic City – has been on the decline. Part of the reason for that is Pennsylvania’s rise; people that used to travel to Atlantic City to gamble have been able to stay closer to home and go to some of Pennsylvania’s casinos.

John Pappas

John Pappas

But now, as Pappas said, New Jersey’s gaming figures have gone up.

“Action is even more urgent given that Pennsylvania’s casinos are subject to the same struggles encountered by New Jersey,” Pappas added. “Last year, half of Pennsylvania’s casinos lost money when compared with 2015. In other words, inaction is allowing New Jersey to regain ground lost to Pennsylvania over the last decade or so.”

In October, the Pennsylvania House of Representatives passed a bill that would have legalized and regulated online gambling, but the Senate never even voted on it.

“Regrettably,” Pappas said, “the state has failed to pass the legislation needed to regulate online gaming in Pennsylvania, leaving all of that money on the table. The decision – influenced by special interests and election-year politics – nullified the commonwealth’s ability to help fund key programs for families, seniors, veterans, and more.”

One of the criticisms of New Jersey’s foray into the online gambling world (both online poker and online casino games are legal in the Garden State) is that it didn’t generate the windfall of revenue that analysts had predicted. Part of that was just poor estimating by said analysts, but part had to do with growing pains. The latter shouldn’t be an issue for Pennsylvania, wrote Pappas:

When online gaming was enacted in New Jersey, there was no yardstick to measure success by. No populous state had ever launched online gaming. Now, with the initial kinks worked out and the market up-and-running at full speed, New Jersey is proving to be a tremendous success.

With the lessons from New Jersey learned, Pennsylvania can easily avoid start-up issues like time-consuming and onerous registration processes, geolocation technology that often-generated false positives, difficulty getting transactions approved, and no mobile platforms.

That means the industry could hit its stride more easily in the commonwealth, with new and more revenue being generated at a much faster rate. That’s good news for Pennsylvania taxpayers and our economy.

And, as one would expect, Pappas warned against unregulated sites that many Pennsylvania residents are likely frequenting now, risking their money with no recourse if something goes wrong. Regulated online poker rooms in Pennsylvania would have to follow strict rules and if the worst-case scenario happened and one went under, customers would almost certainly be able to get their money back.

In early January, State Senator Jay Costa (D – 43rd Dist.) filed a Senate Co-Sponsorship Memorandum, announcing his intention to introduce online gambling legislation. He did not give a time table for his bill, simply stating that it would come “in the near future.”

The bill would use the ones that were in the legislature last year as a base. While not all details were given – that’s what the bill is for – Senator Costa did say the state’s twelve casinos would be eligible to apply for online gaming licenses at $10 million a pop. Technology partners, such as companies that provide the poker software, could partner with the casinos and pay a $5 million licensing fee.

All casino gaming would be legalized under Senator Costa’s plan. The state would take 25 percent of gaming revenues in taxes; the money would go to property tax relief and economic development projects.

Internet gambling devices (think tablets) would also be legalized in the Philadelphia and Pittsburgh airports on a five-year trial basis.

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