State eyes gambling expansion to ease budget deficit

HARRISBURG, Pa. (WHTM) – It’s a pretty good bet that gambling will be expanded in an attempt to fix a state budget deficit estimated between $1 billion and $2 billion.

Whether that includes fantasy sports gambling, internet gaming, or video gaming terminals was still unclear Monday, but insiders say they expect the specifics and a vote in the House by the end of the week.

Lawmakers would rather raise money through sins than commit the political sin of raising broad-based sales and income taxes in an election year.

“Nobody forces you to go to the casino, nobody forces you to gamble,” explained Representative John Payne (R-Dauphin) who chairs the House Gaming Oversight Committee. “Nobody forces you to drink. Nobody forces you to smoke. Those are all things that you make a choice. I don’t mind raising the money from those choices rather than mom and pop on a fixed income and we arbitrarily taxed them on their sales or income.”

Payne says legislative leaders are still hashing out exactly what the final gaming bill will look like, but video gaming terminals are definitely being considered. So, what are VGTs?

“Picture a slot machine that would be located in your fire department, if they have a liquor license, or a club, restaurant, or tavern,” said Representative Mark Mustio (R-Allegheny).

Mustio supports the concept that would put as many as 24,000 machines in 6,000 locations statewide. Mustio insists VGTs would be a jackpot for the state and a huge win for small businesses that already possess liquor licenses.

“By putting these machines in the hands of local Pennsylvania businesses, as opposed to big multi-billion dollar casino corporations that are out of state,” Mustio said.

Those big casinos strongly oppose VGTs, fearing cannibalization that will cost them big bucks. If customers can get their slots fix at the local legion or watering hole, why go to a brick-and-mortar casino?

Mustio counters that it’s already happening illegally and feels it would be better if the state legalized, regulated, controlled and taxed it. He concedes it’s only being considered because of the state’s fiscal woes.

Payne worries that widespread VGTs could hurt local communities in Dauphin County, which enjoy a windfall in grant money from Penn National’s Hollywood Casino in Grantville.

“Dauphin County’s passed out over $8 million in gaming revenue to almost every fire company in Dauphin County,” Payne said. “We have to protect that.”

The horse racing industry has similar fears. It worries VGTs will siphon away bettors, thus hurting the horse racing development fund.

“We’re probably looking at losing, I think the estimates were somewhere around $60 million from the fund,” said Brian Sanfratello, executive secretary of the Pennsylvania Horse Breeder’s Association.

“I would say that’s hooey,” Mustio said, mostly dismissing the cannibalization argument.

He concedes that casino profits may dip a little but says that’s more than offset by the expansion to the state’s coffers.

‘We’re saying let’s take that $60 million dollar hit to get that $400 million additional,” Mustio said.

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