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Pennsylvania House passes four amendments to gambling expansion bill

10 Dec 2015

By Gary Trask
The Pennsylvania House of Representatives passed four amendments on Wednesday to a bill that would expand gambling in the state, as well as license and regulate online gaming.

Included in those amendments was one that passed by a narrow 96-93 vote that would legalize the installation of up to five video gaming terminals (VGTs) in more than 12,000 eligible private clubs, taverns and other venues that hold state liquor licenses and add nearly $200 million in estimated revenue to the budget proposal. The money generated from the machines would be split between club owners (33%), video gambling terminal owners (33%) and the state (34%).

In addition, another amendment that passed by a 124-72 vote would allow Pennsylvania airports to install interactive games through multi-use computing devices. Only passengers that have gone through airport security and have trip tickets would be eligible to play the machines.

With the new amendments added to the bill, a vote was not taken on Wednesday, so it remains on Second Consideration. On Thursday, the House adjourned for the day until Saturday at 12 p.m. EST.

While Rep. John Payne (R-Hershey), the man who introduced the bill (HB 649) earlier this year, told Casino City he was "pleased" with Wednesday's developments, there is a prevailing opinion that the inclusion of the VGT amendments may in fact doom the bill in the long run, since the state's 12 land-based casinos fervently oppose any scenario of having slots machines anywhere but inside their own properties.

"The casinos — all 12 of them — strongly oppose the (video gaming terminals) amendment, which means that as long as that amendment forms part of the bill, the casinos will lobby to overhaul or, if necessary, to kill the measure," GamblingCompliance Research Director Chris Krafcik told Casino City. "In my opinion, there is simply no way legislation as ambitious and wide-ranging as this passes without support from the casinos."

The casinos made their case clear on Monday when they banded together and e-mailed a detailed four-page letter to Payne and other members of the Gaming Oversight Committee.

The e-mail, which was obtained by Casino City, also CC'd Gov. Tom Wolf, the Speaker of the House and other Majority and Minority Leaders. It meticulously asked Payne and his colleagues to consider the fact that "VGTs will harm Commonwealth gaming tax revenue and casino employees," as well as "local communities and businesses" and "gaming patrons" and "undermine public protection."

In conclusion it read, "we again urge the General Assembly to reject any and all legislative initiatives authorizing VGTs in bars and taverns. We note that rejection of VGTs is squarely in the public interest inasmuch as the Commonwealth is a 55% partner in our casinos' slots revenue, and such revenue supports multiple public causes at the state, county and local levels."

During Wednesday's hearing, Rep. William Kortz (D-Allegheny) referenced the e-mail and described it as "disingenuous" and full of "mistruths." His main complaint was the section that stated revenues at the "original nine Illinois casinos" has fallen 43%, from $1.9 billion in 2007 to $1.1 billion in 2013, since the authorization of VGTs at bars and taverns.

"They are inferring that VGTs did this to them and that couldn't be further from the truth," Kortz said.

Kortz explained that in 2008 there was a smoking ban put in place at casinos that dropped revenue by 26%, four years before the VGTs. He also mentioned that casinos lost 15% in revenue due to the recession in 2009 and 2010 and that a 10th casino opened in the state in 2010.

"They failed to mention all of these facts," he said. "Shame on them."

Rep. Greg Vitali (D-Delaware) was one of the bill's opponents to speak on Wednesday, saying the bulk of revenue raised by gambling comes from "poor and unsophisticated people who have addictive problems" and the VGTs will "create more opportunities for their addictive habits."

But while Vitali and fellow opponents of the bill likely voted "nay" to the VGTs on Wednesday, the addition of the amendments may very well be beneficial to their ultimate cause.

When Payne was asked his thoughts on the VGT amendments causing more harm than good to the bill, he was diplomatic.

"Right now we're just happy the bill is still alive because there have been many times during this entire process when we were told that the gambling bill was dead," he said. "The Speaker indicated that the amendments had to go on the bill or it wasn't moving, so the VGTs had to be part of the process. Whether or not that's a good or bad thing, we'll find out when we get out of second (committee)."

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