HARRISBURG - The House gave preliminary approval Wednesday to a proposal to legalize online wagering and permit slot machines in airports and off-track betting sites, a plan supporters say could generate $250 million a year in revenue.

The bill, which also would regulate and tax fantasy sports contests, still needs final approval by the House and in the Senate, where its fate is not assured. Proponents hailed it as a key step as the state inches toward a new fiscal year without a budget deal yet in place.

"Gaming expansion money in one form or another is necessary for this budget process to be complete," said House Majority Leader Dave Reed (R., Indiana).

Among other things, the measure would let casinos licensed here also take online bets from gamblers in Pennsylvania, mirroring laws enacted by other states, including New Jersey.

It passed on a 115-80 vote that cut across party lines, but only after the House rejected a broader proposal that would have legalized video poker and other gaming machines in bars.

During a debate that lasted hours, Rep. Mark Mustio (R., Allegheny) said the goal was "to get revenues voluntarily from video-game terminal players as opposed to going into their pockets for taxes."

Opponents countered that such a step could eat into revenues for the Pennsylvania Lottery, which funds senior programs, as well as existing casinos.

"Harrah's, once again, is an economic engine for our community," said Rep. Thaddeus Kirkland (D., Delaware), arguing against gaming in bars.

Gov. Wolf has also raised concerns about the economic ripple effect of video gaming, particularly on the lottery. Last week, the Department of Revenue projected that legalizing video-gaming terminals could reduce lottery ticket sales by $2.3 billion over 10 years and profits by $592 million.

But the Democratic governor has indicated he could support some form of expanded gambling as part of a budget agreement.

He and the Republican-led Assembly are entering what is supposed to be the home stretch of their negotiations - the state's next fiscal year starts July 1 - though neither has indicated a deal is close.

This week, Wolf backed away from past calls for hikes in the personal income or sales taxes. But his office emphasized Wednesday that a $1 billion shortfall needs to be closed.

@karen_langley