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PennLive Editorial: Pa. should legalize – and regulate – Internet gaming

May 29, 2015

In case you missed it – As Pennsylvania joins a growing list of states considering implementing a legal and well-regulated online gaming program, PennLive editorialized on the subject, advocating that Pennsylvania legislators pass smart online gaming legislation so the state can capture tax dollars while protecting its youth. Following is the full text of the editorial.

Pa. should legalize – and regulate – Internet gaming: Editorial

By PennLive Editorial Board

Pennsylvania legislators should pass an online gaming bill in June both because the state needs to close a seemingly insurmountable budget gap in the next fiscal year, and, simply, because it can.

Pennsylvania faces an estimated $2 billion general fund deficit in the coming fiscal year.

This deficit is troubling for its potential impact to the state’s current and future debt. Bond rating agencies are taking a dim view of the state’s apparent fiscal irresponsibility, sending strong signals Pennsylvania needs to get its House, and Senate, in order.

It’s no silver bullet, but online gaming in Pennsylvania will help ease the deficit, with two caveats. There will be no cash windfall, and the state likely will not generate revenue from online gaming until late next year or 2017 at the earliest.

New Jersey realized $18.5 million in tax revenue last year from online gaming. The Garden State’s revenues are rising this year, though, and Pennsylvania, with 43 percent more state residents 21 years of age or older, stands to gain more tax dollars with similar legislation.

Although Pennsylvania will not realize huge benefits by entering online gaming, it cannot afford to ignore a legitimate revenue source.

Facing significant public pension funding deficits, and with its roads and bridges crumbling, legislators, like expectant retirees who struggle to grasp why an inability to save for retirement should limit their lifestyle in their golden years, find themselves facing decades of tough budgets.

As long as legislators remain disinterested in a severance tax on natural gas extraction, no large pools of cash wait to be tapped for the General Fund.

If Pennsylvania continues to refuse to realize tax revenue on a finite resource, one for which significant profits are earned daily by companies outside the state, it must find revenue elsewhere.

Online gaming is a resource Pennsylvania should mine now.

No law currently exists in Pennsylvania that restricts the ability of a resident to game online.

Legislation sponsored by Rep. John Payne, R-Hershey, the chairman of the House Consumer Affairs Committee, would legalize and regulate online gaming and it is worthy of consideration.

As stands now, a Pennsylvania resident sitting at his or her breakfast table with a smartphone, can spend 10 minutes or less creating an account to play blackjack online.

Enter a credit card number, and you’ll be mulling whether to split two Jacks or double down before your Wheaties wilt.

According to an assessment by GambleOnline.co, which claims to have covered the online gaming industry since 2008, “(online gaming) is not legalized but Pennsylvania residents that gamble online are not likely to be prosecuted because the state is very lenient about their online gambling laws.”

Just because we don’t have a law is not reason enough to pass one. However, Pennsylvania’s lack of oversight leaves tax dollars on the table and exposes its residents to unnecessary risks that could be mitigated with technology.

Smart online gaming legislation would include geolocation, technology that permits a website to see the physical location of a computer, tablet, or smartphone, and restrict access if the user is outside Pennsylvania.

Also, considering the state issues drivers licenses or photo ID to residents age 16 or older, it can restrict kids from online gaming.

Pennsylvania has the means, the motive, and the opportunity to pass online gaming legislation before the end of this budget cycle.

Its elected state representatives should pull the trigger so the state can capture tax dollars it is losing to external operators while protecting its youth.

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