With casino revenue expected to stagnate, report suggests Pa. could tax online bets

A new report commissioned by a state legislative research agency finds Pennsylvania has squeezed just about as much money as it can out of its existing casino industry, although new gaming avenues could be lucrative.The commonwealth gets substantial revenue from casinos, but the revenue growth is tapering off as competition increases from casinos in other states.

“We are at or near a saturation point, given our surroundings,” said Republican Senate Majority Leader Dominic Pileggi, after sitting through a briefing on the contents of the report.

The study’s authors suggest legalizing and taxing online gambling could bring as much as $113 million into state coffers annually — though a lobbyist affiliated with the Sands Casino Resort Bethlehem said that figure is overly optimistic.

Pileggi said it’s certainly possible lawmakers could expand gambling in Pennsylvania this year, given lackluster revenues.

“Fundamentally there’s a policy decision: How much gambling do we want to make available to the citizens of Pennsylvania?” Pileggi said. “Do we want to legalize every form of gambling that every casino operator has ever thought of, and make those forms of gambling available to Pennsylvanians?”

Senate President Pro Tem Joe Scarnati requested the casino gaming study late last year to find out how to boost revenue from the gambling industry, and examine whether it could withstand Internet gaming.

Money is tight; lower-than-expected tax collections are throwing the governor’s proposed budget for next year out of balance by about $1 billion.

“As we move forward, authorization of online gambling in the state will be explored,” said Scarnati in a written statement.

Econsult Solutions, a Philadelphia firm, was hired by the Legislature Budget and Finance Committee to conduct the study. In its report, it suggested relaxing certain regulations would enhance the commonwealth’s tax haul from casinos.

The report also highlighted two specific Internet gambling opportunities for regulating and taxing gambling, known as fantasy sports and prediction markets.

Fantasy sports gambling, such as Fantasy Football, allows people to create their own ideal team and follow individual players’ progress through a season. Prediction markets allow bets to be placed on the outcome of events like an election.