VGT Expansion Proposal Stirs Pot In Harrisburg, Where Gambling’s Often On The Agenda

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It has been less than three years since Pennsylvania lawmakers enacted one of the most widespread gambling expansions in the nation’s history, and the Capitol has been abuzz this week with the possibility of more coming.

Behind closed doors, according to published reports, the Senate Republican caucus has been discussing its leaders’ proposal to legalize video-gaming terminals at thousands of licensed liquor establishments — both bars and clubs.

That prospect has drawn rebukes from, among others, the casino industry, the governor’s office, backers of Pennsylvania skill games, and legislators who maintain the state has plenty enough gambling already, thank you.

With that array of opposition, the same news outlet that was first to report on the behind-the-scenes VGT effort followed up with an article Tuesday offering pessimism about the proposal’s chances.

“The timing to me is just wrong,” one GOP senator, Robert Tomlinson of Bucks County, was quoted as saying by Spotlight PA, an enterprise news operation of various Pennsylvania publications, including The Philadelphia Inquirer.

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Senate leader backed by pro-VGT group

The initial Spotlight PA story last Friday carried an eye-catching headline: “Top Pa. GOP lawmaker fast-tracking a lucrative gambling expansion that would benefit a major campaign donor.”

The “lawmaker” is Senate President Pro Tempore Joe Scarnati, a Jefferson County Republican who is retiring at the end of his current term.

The “major campaign donor” is Golden Entertainment, a Las Vegas-based operator of 10 casinos and 60 taverns. Its website also states: “We’re the largest distributed gaming operator in the U.S., operating more than 10,500 gaming devices across Nevada and Montana. Future operations coming soon in Pennsylvania and Illinois.”

The state’s 2017 gambling expansion received the most attention for making sports betting, online casino games, and construction of mini-casinos possible.

But it also legalized VGTs — which are similar to casino slot machines — at truck stops meeting certain criteria. The qualifying locations can have up to five machines, and thus far there are 27 truck stops with 135 gambling devices, with more added each month.

Spotlight PA reported that Scarnati and Senate Majority Leader Jake Corman were pushing a plan backed by Golden Entertainment, but with no bill yet introduced, to broaden the VGT locations to bars and social clubs, which are desperate for funds in the wake of COVID-19 shutdowns.

With such a change, tens of thousands of the machines would likely be played legally in the state, instead of hundreds.

Casinos alarmed by potential competition

While advocates of the plan say it would benefit the state by regulating and taxing a practice taking place anyway, the proposal is alarming to the casino industry. Operators of 13 casinos have invested hundreds of millions of dollars in their properties, which have a combined 24,000 slot machines, without counting on facing such new competition.

The casinos are also facing their own dire revenue consequences already from being closed for 12 weeks or more due to the coronavirus health threat.

A casino-backed group, Pennsylvanians Against Illegal Gambling, has been running full-page newspaper advertisements alerting the public about the Senate GOP plan, even without any bill yet introduced, let alone any formal vote scheduled.

“Certain lawmakers in Harrisburg are rushing to put slot machines on every street corner in every neighborhood across our state,” the ads say. “And they want to do it under cover of darkness, without any public input or hearing. Don’t let them.”

The ads, which list Scarnati’s and Corman’s office phone numbers for people to call and voice opposition, also warn about the additional VGTs’ potential impact on the Pennsylvania Lottery, which benefits senior citizen programs.

The Lottery operates through the Pennsylvania Revenue Department under Gov. Tom Wolf, and his spokeswoman told Spotlight PA the governor is not prepared to back another gambling expansion.

“There are a multitude of legal gaming options already available for Pennsylvanians to play, including lottery, iLottery, slot machines, table games, sports gaming, internet gaming, fantasy sports, etc.,” said Lyndsay Kensinger. “Any new gaming dollars will siphon existing gaming revenue streams that benefit Pennsylvanians, like the lottery fund and property tax relief fund.”

Skill games still in question

The immediate timing of the VGT discussions comes because after June 30, the Pennsylvania legislature typically takes the summer off and then returns for a short September-November schedule to conclude the two-year session. Lawmakers are also distracted in the fall, however, by election campaigning.

Whether the Senate GOP leaders will even bring up their plan for a floor vote is in question at this point. They would likely need some Democratic support to pass it, as there are members like Tomlinson in their own ranks who oppose it.

And even if passed, it faces no certainty of consideration or passage in the House, which is also Republican-controlled, and carries the prospect of a gubernatorial veto should it reach Wolf’s desk.

Regardless, the legislature may still need to come to grips with the gray area of machine gambling taking place in many Pennsylvania establishments.

Thousands of the so-called “skill games” are in use at not just licensed liquor establishments but other outlets like convenience stores and gas stations. Providers of those games have their own opposition to the GOP plan, which they don’t see benefiting them.

The law surrounding their existing machines, which operate with both similarities and differences to slot machines and VGTs, is murky, and different legislators have proposed either regulating and taxing them or outright banning them.

While the odds for VGT expansion seem to be dimming, it’s a pretty good bet that discussions in Harrisburg of whether, when, and how to add more legalized gambling in Pennsylvania are far from over.

Photo provided by Shutterstock

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Gary Rotstein

Gary is a longtime journalist, having spent three decades covering gambling, state government, and other issues for the Pittsburgh Post-Gazette, in addition to stints as managing editor of the Bedford (Pa.) Gazette and as a reporter for United Press International and the Middletown (Conn.) Press. Contact Gary at gary@usbets.com.

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