Internet gaming bill introduced in Pa. House

Pennsylvania State Rep. John Payne, the new chairman of the House Gaming Oversight Committee, is taking an activist approach to helping the casino industry stay competitive.

One day after scheduling a series of hearings to explore ways to expand gambling and examine regulations, Payne (R., Dauphin) introduced a bill Wednesday to legalize Internet gaming.

"We looked at the fact that Jersey has it, Delaware has it, Las Vegas has it," Payne said. "It would be a mistake for Pennsylvania to sit here and wait until Ohio has it, Maryland has it, New York has it, and we're the last ones coming to the game. We've got to be up and running and be able to compete with the surrounding states."

But Payne and his cosponsors, including Nick Kotik (D., Allegheny), the Democratic chairman of the committee, have extremely optimistic revenue expectations, judging by experience in New Jersey, which launched online gaming in late 2013.

Projected Pennsylvania tax revenues in the first year of Internet gambling are $120 million - money that could help with the state's projected $2 billion deficit for fiscal 2016. At the proposed 14 percent tax rate, gross revenue from Internet gambling would have to be $857 million to meet the $120 million tax target.

That is at the high end of forecasts for online gaming in New Jersey, where actual revenue fell far short of expectations in the first full year, reaching just $122.9 million, according to the New Jersey Division of Gaming Enforcement.

On Wednesday, two gaming executives had a rather sober reaction to the prospect of online gambling in Pennsylvania.

At a hearing in Harrisburg, state Gaming Control Board member Gregory C. Fajt asked Ron Baumann, general manager of Harrah's Philadelphia in Chester, for his position on the "off-site Internet gaming that's being discussed."

Baumann said he would welcome online gambling. "We believe that it could certainly enhance the overall revenues," he noted.

Bob Green, chairman of the company that owns Parx Casino in Bensalem, the top-grossing casino in Pennsylvania, sounded a cautious note.

"If it's to be done, it has to be done right. The first priority must be to protect the bricks-and-mortar casino industry," Green said. Online gaming would have to "be integrated into the existing casino industry and be an extended service within the Pennsylvania customer base."

Payne said protecting the state's industry is one of his goals. "I believe part of my job as chairman is to make sure that the casinos are vibrant and healthy financially," he said.