Possible ‘One-Year Fix’ For PA Budget Could Endanger Short-Term Prospects For Online Gambling

A rumored budget plan from House Republicans in Pennsylvania raises the possibility that online gambling could be pushed off the agenda for this year.

The latest on the PA budget

The progress of a gaming package in PA — one that would also legalize online gambling and daily fantasy sports — has stalled during a stalemate over how to pay for the state budget. The House and Senate have been at odds in trying to raise nearly $2 billion in new revenue.

The Senate passed an overarching revenue package in July that included $200 million from a gaming package. But the House has not acted.

And Republicans in that chamber appear set on advancing the legalization of video gaming terminals, an issue that is a non-starter in the Senate. VGTs alone could derail online gambling, and that’s not to mention what the House is working on now.

What the House might want to do

The latest, however, sounds like we’re coming closer to the House wanting to punt on any new revenue measures — the gaming bill and online gambling included.

From a Penn Live editorial:

There are rumors that House members are considering a plan to balance this year’s budget by raiding other funds.

This one-year fix is the worst possible idea because it not only pushes the solution to our structural deficit off to another year, but it deepens the problem. House leaders must recognize that we need recurring revenues and bring a tax code bill to the floor. The bill passed by the Senate is a good starting point because it includes a severance tax on natural gas drilling. This is long overdue.

And more details from City & State PA:

More than a dozen members were gathered in the House’s majority caucus room Monday, working over a plan that included the utilization of special funds to reduce the need to borrow as much as $1.2 billion from the state’s Tobacco Settlement Fund – a controversial move provided for in an earlier Senate-passed revenue plan – to balance FY 2016-2017.

It’s not known whether gambling is still in the mix in that plan as described. Whether anyone will go along with an entirely short-term fix is unclear, but the state likely needs to do something, soon.

Things aren’t getting better in PA, in the meantime

The House has not even been able to produce or advance its own revenue plan to pay for the budget. That increasingly has ramifications for the state, where there have been calls to freeze spending:

  • The state treasure says the state could be $1.6 billion in the hole as of next month.
  • The state might have to start to put off paying some of its bills.
  • Running the state without a revenue package risks a downgrade of the state’s credit rating.

Gov. Tom Wolf called out House Republicans this week. Meanwhile, even Senate Republicans are fed up with their own party in the House, with Senate President Pro Tempore Joe Scarnati calling the budget stalemate “an embarrassment.”

PA kicking the can down the road on iGaming?

If the PA government puts off passing online gambling, it won’t be without precedent. Just last year, lawmakers and Wolf agreed to a revenue package that would count on $100 million from a gaming package. That gaming bill never passed.

Until the rubber meets the road when the House returns to session in early September, it’s difficult to handicap what will happen. The process of creating a revenue package remains very fluid.

Still, pretty much everyone in the legislature appears to have agreed that online gambling should be a piece of the revenue puzzle. But the brinksmanship being exhibited around the PA budget could mean online gambling is on shaky ground for 2017.

Content Credits: www.onlinepokerreport.com

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