Pennsylvania Considering Video Gaming Machines Again?

On February 12, 2014, the Pennsylvania House of Representatives’ Gaming Oversight Committee held a hearing to receive testimony regarding the prospects of legalizing electronic gaming devices, i.e video gaming machines, in the Commonwealth. The hearing focused on gaming along the lines of what was raised in a prior session’s bill, (2014 House Bill No 1932), which sought to legalize video gaming machines for bingo, keno, blackjack and other games for use in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels and clubs.

With a looming budgetary deficit Pennsylvania legislators are exploring various ways to increase gaming related tax revenue, including potentially moving forward with internet gaming through its existing bricks and mortar casinos. This recent Gaming Oversight Committee hearing revisiting the video gaming machines issue would be another means through which to generate gaming based tax revenue. The hearing’s witnesses touted the jobs and tax revenues generated by Illinois which implemented video gaming machines in bars, restaurants, taverns and truck stops several years ago – (projected IL tax revenues in excess of $250 million in 2015). While Illinois has had success generating tax revenue and producing jobs with its video gaming machine roll out, the machines do compete, on a low end basis with the states’ existing casinos. While local municipalities in Illinois can opt out of the video gaming program that option may not exist in a Pennsylvania bill and opposition from Pennsylvania’s casino industry remains to be seen.

Also, if considering video gaming at bars and taverns Pennsylvania may be well served to learn from some of the mistakes made with the passage of last year’s Tavern games legislation. Tavern games, with its gaming regulatory scrutiny focused on the bars/tavern owners, rather than through the games’ owners and route operators, lead to cost issues and a reluctance to move forward which hampered widespread implementation of tavern gaming. In addition, while Illinois has had relative success with its multi-tiered system of manufacturers, distributors, operators and establishments, that system has one too many layers to operate as effectively as it otherwise could. Few recall Pennsylvania’s short-lived requirement of local suppliers of slot machines layered between the industry’s manufacturers and end user casinos. The removal of the local supplier requirement opened the way to the implementation of Pennsylvania casinos in 2006. Finally the Pennsylvania Gaming Control Board and its agencies are more than capable of regulating and rolling out video gaming should it become law. Bringing in other, less experienced state agencies, such as Liquor Control or the Department of Revenue would only further complicate and delay implementation should the law pass.

Duane Morris’ Adam Berger Writes on “Tavern Gaming: Did Pennsylvania Gamble Away a Huge Revenue Opportunity?”

Duane Morris’ Adam Berger, an associate in the firm’s Cherry Hill office, authored “Tavern Gaming: Did Pennsylvania Gamble Away a Huge Revenue Opportunity?” which appeared in the Philadelphia Business Journal on March 13, 2014.

In a move meant to increase Pennsylvania’s state and local tax base, Pennsylvania Governor Tom Corbett signed into law a bill that allows bars and taverns throughout the commonwealth to offer certain games of chance, known as tavern games. They include pull-tabs, daily drawings and certain raffles. Pull-tabs are games of chance that involve a ticket in which a player pulls, peels or pops open a selected part of the ticket to reveal images for a chance to win a prize based on what the ticket shows. These games may not offer a single prize higher than $2,000 or $35,000 in any consecutive seven-day period.

Click here to read the full article on the Philadelphia Business Journal website.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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