Pennsylvania Budget Shortfall Considers Online Poker as a Possible Solution

May 19th, 2016 | by Jason Reynolds

The Pennsylvania budget for the 2016-2017 fiscal operating year proposed by Governor Tom Wolf (D) comes in at $33.3 billion, which is $3.3 billion, or 11 percent higher, than the current allocation. To make up for the gap, Wolf and state democrats have suggested raising the state’s income tax from 3.07 to 3.4 percent.

Pennsylvania Governor Prostate Cancer

The Pennsylvania budget being proposed by Governor Tom Wolf, pictured here, has some work to do in overcoming a $1.8 billion deficit. Can iPoker be part of the solution? (Image: Marc Levy/AP)

According to independent projections by the state legislature, the proposed budget would create a $1.8 billion deficit in Harrisburg.

Republicans aren’t willing to raise taxes on any demographic. The GOP controls both the State House of Representatives and State Senate, meaning should Wolf’s budget find a road to passage, new sources of revenue will first need to be discovered.

Enter online gambling and Internet poker.

State Rep. John Payne (R-District 106) introduced House Bill 649 in February of 2015, and the lawmaker believes legalizing iGambling will not only protect consumers but also raise money for the state.

“Legalizing, regulating and taxing interactive gaming in Pennsylvania should be given due consideration before any broad-based tax increases,” Payne said in November after his House Gaming Oversight Committee voted in favor of the measure.

Online Poker Gets Another Look

As pressure mounts in the face of the June 30 budget deadline, Republicans typically opposed to gambling expansion are slowly considering backing Payne’s efforts over raising taxes.

House Republicans confirmed this week that online gambling and poker is certainly not off the table as one viable way to patch holes in an unfunded and expanding budget.

Payne told the Reading Eagle this week that Internet casinos aren’t an end-all solution to making up a nearly $2 billion, but it’s a start. And in the meantime, Pennsylvanians would be better safeguarded from rogue offshore platforms.

“Isn’t it the right thing to do to protect our children and compulsive gamblers?” Payne asked.

Wolf’s office said the governor is willing to consider any new market that might generate additional and sustainable revenue, and that extends to online gambling.

Interstate Love Song

The ballad to a successful online poker narrative has long been written, but gaming regulators in New Jersey simply won’t serenade the verses. For an online poker market to thrive, an obvious necessity is a room stocked full of players, something Delaware and Nevada have at times struggled to obtain.

The two states have entered an interstate compact to share player pools, but sluggish activity remains and continued to hold back revenues.

More than double the size of those two states combined in population, New Jersey could greatly aid in the iPoker markets if it would open its borders to interstate play. To date, gaming officials have fended off such requests.

Pennsylvania possesses the potential to eliminate the need for New Jersey from the equation should Payne’s legislation become law. But the proposition doesn’t currently mention any stipulations when it comes to entering interstate compacts.

HB 649 would charge a one-time $10 million fee for online gaming licenses, with $2 million going towards problem gambling programs. Revenues from Internet gaming would be taxed at 14 percent.

With upwards of 13 million residents, Pennsylvania would likely be capable of supporting its own independent iPoker market, but supplementary income could be for the taking should the Keystone State join Nevada and Delaware online.

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