Internet Gambling Could Net Pennsylvania $113m Tax Gain

This week Pennsylvania received the results of the report it commissioned Econsult to undertake back in December 2013, and the message seems to be overwhelmingly in favour of an expansion of the state’s gambling industry. Amongst the most lucrative wagering options suggested by the report entitled ‘The Current Condition and Future Viability of Casino Gaming in Pennsylvania’ was the introduction of igaming and sports betting.
Of key concern for Pennsylvania is plugging a huge $1.2 billion gap which has opened up in its state budget, a situation which has been compounded further by a decline in its land-based casino industry which in 2013 reported its first drop in revenues by 1.4% to $3.1 billion, with $1.4 billion then being collected in the form of gambling taxes. As Sharon Ward, director of the Pennsylvania Budget and Policy Center, explains:
“The only way you can close a deficit of that size is with budget cuts in areas such as health care or education, or with revenue increases.”
The Econsult study highlights the important role increased competition from neighbouring states has played in the decline, with New York, Maryland, Ohio, and a possible expansion of New Jersey’s  casinos to Camden and Meadowlands expected to shrink Pennsylvania’s gambling market by 12% within the next five to six years.
In order to counteract falling growth, the report has suggested Pennsylvania could add a further $307 million a year to its gambling revenues by embracing online gambling, $178 million of which would be generated by online casino games and $129 million by internet poker. The Keystone State could then expect to collect around $68 million in tax revenues for the first year, thereafter rising to around $113 million annually.
According to the report, Pennsylvania’s land-based casinos would also be positively affected by an expansion into igaming, as apparently online gambling appeals to new gamers and not the casinos’ traditional customer base. This specific issue could be the clincher, and as  point Chris Krafcik of GamblingCompliance.com recently pointed out on his Twitter account:
“Sen. Tomlinson told me in Dec. ’13 that he would not push a bill unless evidence showed #iGaming was complementary with land-based gaming.”