Pennsylvania: 24 Hours Alcohol? Huh? Budget shortfall opens door for more gambling and more failed fiscal policy

Budget shortfall opens door for more gambling

A gambler plays a slot machine at the Sands Casino Resort Bethlehem. A raft of new options could put casino-like gambling in towns across the state were introduced this week, including slot machines at satellite locations. (Emily Robson, MORNING CALL FILE PHOTO)

With Pennsylvania facing a $2.3 billion budget shortfall, some legislators think they have a proven method to help close it: more gambling.

That is, except one. Sands Casino Resort Bethlehem President Mark Juliano was the lone casino executive to denounce most of the proposed expansion, arguing it would only cannibalize the $3 billion-a-year industry the state has built with its 12 casinos.

The new proposals, if adopted, would represent a massive expansion of the state's gambling laws. One bill introduced Wednesday in the Senate would allow existing casinos, for onetime licensing fees of up to $10 million, to offer Internet gambling, open satellite locations with 250 slot machines and place slot machines at off-track betting facilities.

A separate bill in the House would make almost any tavern or restaurant with a liquor license eligible for up to five video gaming terminals, potentially putting slot-machine-like gambling in hundreds of locations statewide.

Another proposal would allow slot machines at international airports, including Lehigh Valley International.

All of it would be a mistake, Juliano testified this week before the Senate Committee on Community, Economic and Recreational Development.

"Today, proposals are being considered which will erode the successful progress we have made in Pennsylvania," Juliano said. "Approving Internet gambling, slots at OTB's and VGT's will only hurt the business that many in Harrisburg say they want to help."

But Juliano was largely alone in condemning most of the new gambling options. Though none of the casino executives wants video gambling in taverns, most supported Internet gambling statewide so long as the tax rate is low and it's controlled by existing casino operators. Some of the horse racing casinos also supported placing slot machines at off-track betting facilities.

"Penn National firmly believes that I-gaming is a vital tool to enable Pennsylvania's gaming industry to continue to evolve and protect what has been built here," said Eric Shippers Sr., an executive with Penn National Gaming Inc., which runs the Hollywood Casino in Grantville, Dauphin County. "The advent of intense competition in every direction, however, necessitates that the commonwealth and the industry do things differently."

Every casino, including the Sands, agreed on a few proposed concepts. They all want the ability to serve alcohol 24 hours a day, eliminating the current restriction that stops the flow between 2 and 7 a.m. And they agreed that tax credits should be offered to casinos willing to invest in development, such as a hotel, that would help draw patrons from out of state.

The flurry of new gambling proposals comes as legislators spar with Gov. Tom Wolf over his $33.8 billion budget that relies heavily on new or higher taxes on everything from cigarettes to personal income. Many of the gambling proposals have been rejected before but are back again because legislators see them as preferable to raising taxes.

The Senate bill would offer casinos a menu of new options they'd have to pay hefty licensing fees to get. For $5 million, they could serve alcohol non-stop. Another $5 million would enable some to place 250 slot machines in off-track betting facilities, and they'd even get a chance to open satellite slot facilities within 20 miles of their casinos. As many as two additional satellites could include 250 slot machines each, provided the casino pays a $5 million fee for each new facility.

For $10 million, casinos would be licensed to operate online gambling, in which state residents would play online through a casino website, so long as they initially registered their new account at the casino. The state would not only get all the licensing fees, but it would then be able to tax all the gambling created by the new offerings.

While options such as unending alcohol service are attractive to casinos, there's a real question about whether casinos are willing to pay those fees.

"Definitely, 24-hour alcohol service would be an enhancement for us," said Mike Bean, CEO at Mohegan Sun at Pocono Downs, near Wilkes-Barre. "But I'm not sure we'd be willing to pay a $5 million fee for it."

A separate House bill would allow taverns and restaurants with liquor licenses to buy an additional license to operate up to five video gaming terminals, which are not slot machines but offer similar gambling games.

Muhlenberg College political science professor Chris Borick said there's probably never been a better time to trot out a concept that failed before.

"The need for revenue is a powerful force," Borick said. "When the money is short, the move toward more gambling becomes much more likely."

Borick added that, in Harrisburg, it usually takes more than one viewing for a proposal to gain support. Internet gambling, for example, got little traction last year but appears to be picking up momentum now. However, video gaming terminals in taverns would appear to be where Internet gambling was years ago.

It might all come down to one thing: How desperate are legislators to avoid Wolf's proposed tax increases?


http://www.mcall.com/news/mc-pa-gambling-expansion-20150611-story.html