Expanded gaming on the table for budget talks

HARRISBURG - If proponents of expanded gambling have their way, Pennsylvania may fill part of its looming budget gap with income from round-the-clock cocktails in casinos, slots machines in airports, and wagers made legally on phones and laptops.

The House last week toyed with measures that would have legalized online gambling, allowed slot machines at airports and offtrack betting sites, and permitted 24-hour liquor sales at casinos. One proposal would also have allowed video-gaming terminals at bars and truck stops.

The bills failed to gain traction - one was voted down by a 2-1 ratio. But the issue will soon have another day.

Next week, legislators will return for what promises to be weeks, at least, of haggling over the budget. And Republican leaders intend to make gambling part of the discussion.

"Our goal is for gaming revenues to be part of the final budget package," House Majority Leader Dave Reed (R., Indiana) said Wednesday. "We wanted to kind of test it out in May, but obviously when we come back in June it will be full guns a-blazing trying to get a budget done, and that will be part of that process."

With the July 1 budget deadline looming, the Wolf administration and legislative leaders insist that they do not want a repeat of this year's lengthy impasse, one that left schools and nonprofits in a precarious financial state.

But to reach a new deal, they will have to bridge a sizable budget shortfall - cutting state spending, bringing in new cash or a combination of both, all in an election year.

Gov. Wolf has said the state must raise taxes to fill a billion-dollar budget hole blamed in part on swelling pension, human service and corrections costs.

Leaders in the Republican-controlled legislature have bristled at the Democratic governor's prescription, instead calling for identifying new revenue streams and cutting costs.

Among the provisions introduced last week is one that would allow online gambling, but have it managed by casinos in the state.

Online gambling is currently legal in Nevada, New Jersey and Delaware, as well as the U.S. Virgin Islands. Proposals to legalize the activity are also pending in California, Massachusetts, Michigan and New York, according to the National Conference of State Legislatures.

House Republicans say the gaming proposals would generate $278.5 million in license and fee revenue for Pennsylvania in the upcoming fiscal year. House Democrats produced a tentative projection of $206.5 million.

Although he sounded less enthusiastic, Reed's Democratic counterpart, House Minority Leader Frank Dermody (D., Allegheny), said a gambling expansion could be part of the deal.

"I think there's a better way to raise revenue that's recurring revenue," he said. "[But] if gaming has to be part of it, I'm happy to talk about it."

Wolf's spokesman said the governor would consider expanding gambling but believes that cannot be the only new revenue source.

"That alone will not solve the issue of balancing our budget and fixing the deficit, but it could be part of a larger revenue package, and he's open to that," spokesman Jeff Sheridan said.

Before a gambling expansion could reach the governor, though, it would have to get through the Senate. Its fate there is less clear.

Majority Leader Jake Corman (R., Centre) said the Senate is open to expanding gambling, but he questioned how much new revenue could be generated by the proposals.

Minority Leader Jay Costa (D., Allegheny) is flat against adding new forms of gambling in the state.

"We're not really interested in doing gaming expansion," Costa said. "I personally feel that it is simply not appropriate that every time we have a revenue shortfall in Pennsylvania we look to the gaming community and folks who want to gamble to resolve it."

klangley@post-gazette.com717-787-2141

@karen_langley