Pennsylvania Gambling Expansion and Budget Deficit Remedy Efforts Hit Another Setback

Pennsylvania’s budget stalemate is yet to be solved a week after lawmakers spread words of optimism about the nearing end of the impasse. The state’s budget for the current financial year has a massive $2.2-billion gap waiting to be closed and legislators are entering a fourth month of fruitless negotiations.

Reports have emerged from local media that the House was planning to introduce on Tuesday yet another budget deficit plan after its latest effort to mend the situation was voted down by the Senate. However, that new scheme only made it to discussions behind closed doors and quickly died.

The House has previously pointed out that it would do its best to avoid any tax hikes in order to provide much-needed revenue for the state’s budget. However, its latest plan encompassed an increase in the state hotel tax, a move that would have forced the cities of Philadelphia and Pittsburgh to pay the highest state-and-city hotel taxes in the United States.

That measure was contested immediately and it seems that it will not be considered for now. Meanwhile, Pennsylvania Gov. Tom Wolf expressed his growing frustration with the ongoing budget stalemate on Wednesday. The state’s top official told his fellow legislators that he could eventually resort to taking unilateral actions, although he does not consider a move of this kind the right approach to policy-making.

Gov. Wolf revealed that he plans to borrow $1.2 billion from the state Liquor Control Board, known to be operating Pennsylvania’s monopoly over liquor. The money will be raised against future contributions the board is set to make to the state’s coffers, and will be used to cover lingering budget deficit from the previous fiscal year.

Where Does Gambling Stand in the Ongoing Budget Talks?

Pennsylvania’s budget discussions has been changing direction so rapidly over the past several months that it has become difficult to track where exactly legislators are planning to get money from in order to close the massive gap.

Both lawmakers from the Legislature’s two chambers as well as Gov. Wolf himself have pointed out that the state would need recurring revenue. Gambling has been considered as potential source of such revenue, but legislators from the Senate and the House have somehow never managed to reach an accord on how exactly the state’s gambling industry should be used to produce revenue for the state’s budget deficit.

The legalization of online gambling and daily fantasy sports has appeared on the discussion table on multiple occasions both since the beginning of 2017 and since the beginning of the current fiscal year on July 1. However, it is right now unclear whether the move will be included in any future budget deficit solution plan.

Here it is important to remind that the iGaming/DFS legalization proposal has been tacked onto a larger gambling expansion package produced earlier this year in a bid for lawmakers to find additional revenue sources for the coffers.

A big stumbling block in the eventual passage of the gambling expansion effort was the legalization of the so-called video gaming terminals. The controversial slots-like machines are already operated at truck stops, bars, and other public facilities, but are considered a gray sector due to the lack of proper regulations.

The state House has expressed support for the legalization of VGTs, but the Senate has contested the move over problem gambling and gambling addiction concerns. In addition, there have been concerns that instead of producing new tax revenue for the state, the machines could cannibalize existing revenue from the state’s casinos as players will be able to access them more easily due to their location at bars and truck stops.

Although the future of online gambling and the proposed gambling expansion is rather unclear at present, it seems that the effort is not dead yet in both chambers of the Legislature, which means that action could eventually be taken in that direction.

Lawmakers are scheduled to resume discussions on October 16.

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