Bucks lawmaker: Legalizing I-gambling won't solve Pa.'s budget troubles

ASSOCIATED PRESS Sign me up: N.J. residents broke from turkey for Internet betting.
ASSOCIATED PRESS Sign me up: N.J. residents broke from turkey for Internet betting.
Posted: June 05, 2014

HARRISBURG - A state senator from Bucks County sees no need to rush into legalizing Internet gambling this month, a move considered by some as one way to help plug the gaping hole in next year's state budget.

"The revenues are so insignificant to this budget," Republican Robert "Tommy" Tomlinson said after a hearing Tuesday at which an economist estimated that Pennsylvania could reap $68 million in tax revenue in the first year of Internet gaming.

Tomlinson, whose district includes Parx Casino in Bensalem, said the key question for him is whether Internet gambling would help or hurt bricks-and-mortar casinos.

"It's not going to be whether it will help this year's budget. It won't," he said.

Lawmakers returned from a recess this week facing a projected budget deficit of as much as $1.2 billion for the fiscal year starting July 1.

State Senate President Joseph B. Scarnati III (R., Jefferson) made a brief appearance at the nearly four-hour session of the Senate Community, Economic and Recreational Development Committee and was clearly focused on the budget when he questioned Stephen P. Mullin, whose firm, Econsult Solutions Inc., made the tax-revenue projection in a report released last month on the future of gambling in the state.

Gaming Control Board Chairman William H. Ryan Jr., testifying after Mullin, urged the Senate panel to use caution in developing revenue estimates.

"It would seem to me, from what we are observing, that intrastate I-gaming will never be big," Ryan said. "The way it looks now, it doesn't look like it's going to approach the bricks-and-mortar casinos. It's just not there."

That could change over time, however, he noted.

By asking for a year to implement I-gambling, Ryan also put a damper on the notion that tax revenues from it could help with the 2014-15 budget.

New Jersey regulators took nine months to launch Internet gambling, which began in November, but several speakers Tuesday said that rush may have contributed to the state's lower-than-expected revenues so far.

Of nine casino executives who testified, most expressed little opposition to I-gambling as long as they were the only companies eligible for licenses and it was structured in a way that did not hurt their primary operations.

But Bob Green, chairman of Parx owner Greenwood Gaming & Entertainment Inc., said legalization of online poker in New Jersey has hurt Parx.

"We have lost 20 percent of our New Jersey poker players in our poker room," Green said. "I don't think you can say with any authority that there is no impact on bricks-and-mortar casinos."

Wendy Hamilton, general manager of SugarHouse Casino in Philadelphia, urged the senators to monitor Internet gaming for a year, to see how it goes in states that have adopted it, before legalizing it.

"There are no facts that exist yet to tell us whether it will be helpful or harmful. We're watching as closely as everybody else," Hamilton said.

It was no surprise when a representative of Las Vegas Sands Corp., which owns Sands Casino Resort Bethlehem, started railing against online gambling.

But a question by State Sen. Randy Vulakovich (R., Allegheny and Butler) elicited an economic argument against Internet gambling that has generally been overlooked in coverage of Sands Chairman Sheldon Adelson's opposition to Internet gambling.

Andrew Abboud, senior vice president for government relations and community development for Las Vegas Sands, said his company had thoroughly studied the business of Internet gambling from a financial perspective and found that "the cash flow never came back any better than marginal."

But, Abboud said, it is coupled with huge risks - for example, of class-action settlements for underage gambling - that could doom the industry.

"To us, it is just such a fundamentally stupid idea to go down this path," he said.


hbrubaker@phillynews.com

215-854-4651

@InqBrubaker

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