INTERNATIONAL POLICY DIGEST

Gambling in Pennsylvania has been a benefit to the state.

Since the legalization of online gambling in Pennsylvania in late 2017, the state has become one of the primary gaming locations in North America. There can be no doubting the state’s growth in this market over time.

This has been borne out by the recent numbers, with the state generating a record $404.1 million in total revenue during April alone, representing a nominal increase on the previous record of $403.1 million (achieved just four weeks earlier in March).

The road to legalizing all forms of gambling in Pennsylvania has been a long one, and one that simply wouldn’t have been possible without the efforts of lobbyists. We’ll explore this below while exploring how Pennsylvania became a true trailblazer for both on and offline gambling.

For decades, lobbyists and lawmakers in Pennsylvania have focused on gambling legislation as a way of boosting economic growth, especially from the perspective of job creation and the reduction of the state’s considerable fiscal deficit.

The first sign of success came with the passing of Act 91 in 1971, which created a state lottery that was established as a government-run entity.

This was eventually sold as a method of providing tax relief to the elderly for property taxes paid during 1971 and thereafter, with the target demographic featuring individuals aged 65 years of age or older.

It also helped to curb illegal and illicit gambling operations in the state, with this reasoning subsequently used by lobbyists to legalize offline casino gambling in Pennsylvania. These efforts continued throughout the 1980s and 1990s, with the first major movement taking place in the Poconos resort area.

However, residents widely rejected the proposals throughout multiple polls, with most citing a general opposition to gambling.

1993 and 1994 saw another sustained push to legalize gambling, this time on riverboats. This time, a detailed economic argument was used to promote increased tax revenues and job creation, but this was countered by selected experts who said that the creation of such an industry would increase crime and cost the state money over time.

Another contributing factor to the bill’s failure was the approach of Tom Ridge, the newly elected governor, who demanded a series of voter referendums as a condition for his support of any subsequent legislation. A further failed attempt followed in 1999, while lobbyists saw an inaugural gaming bill approved by the State House. However, a further referendum to vote on the legalization of slot machines at four racetracks and riverboats never took place, leaving the bill to gradually fall by the wayside.

It was in 2004 that legislators finally passed Act 71, as lobbyists finally saw progress in their push to legalize gambling.

Also known as the Pennsylvania Racehorse Development and Gaming Act, this piece of legislation sought to legalize casinos and racetracks within the state, in a bid to create thousands of jobs and introduce the type of property tax relief achieved through Act 91 of the early 1970s.

This bill was passed as the moral, social, and ethical grounds that had previously restricted such bills were no longer as prevalent, thanks largely to a wider generational shift and gradual changes in cultural attitudes.

The fruits of this labor were soon borne out too; as seven casinos produced machine revenues of more than one billion during their first 12 months in operation, which in turn yielded tax revenues of approximately $766 million.

By 2016, there were around 18,000 people employed by various racetracks and casinos state-wide, with these locations generating as much as $1.4 billion per annum in tax revenue.

In many ways, this fiscal success broke the longstanding resistance to gambling in the state, with lobbyists soon calling for the legalization of online verticals in both casino and sports betting markets throughout the digital age.

In terms of the former, lawmakers were able to piece together the comprehensive 2017 TruckStop and Satellite Casino Bill over the next decade or so, with this legislation including a plan to establish 10 new mini-casino resorts and bring casino games to online portals.

Passed on October 26th, 2017, and signed into law on October 30th, this bill effectively made online casino gambling legal in the state, while the decision to strike down the PAPSA legislation in May 2018 (which had prohibited sports betting at a federal level) subsequently enabled lawmakers to legalize sports betting throughout the state.

There’s a great deal that the world can learn from advanced countries such as Finland, but that Scandinavian nation should certainly heed the lessons of Pennsylvania when it comes to legalizing online gambling.

It’s fair to say that the legalization of both off and online gambling in Pennsylvania wouldn’t have been possible without the efforts of lobbyists, who have consistently highlighted the economic and social benefits of regulating casino gameplay and sports betting and leveraging its potential tax revenues.

This also provides hope for states like New York, which continue to wage a similar legislative fight and deal with immense setbacks with every passing year.