HARRISBURG -- As legislators look to close a growing budget gap, a Senate panel heard testimony Tuesday on the possibility of legalizing Internet gambling in Pennsylvania.
Online poker and online casino gaming could produce total Pennsylvania-based revenues of $180 million in the first year and $300 million in subsequent years, said Stephen Mullin, president of Econsult Solutions, a Philadelphia firm hired by the Legislature to produce a report on Pennsylvania casino gaming.
If the state legalized and taxed online poker at 20 percent and online slots-style games at 60 percent, Econsult estimated, it could bring in $68 million in direct tax revenues the first year and $113 million in following years.
The revenue projections are of particular interest as legislators enter the final weeks before the June 30 state budget deadline. The state faces a projected shortfall of more than $1 billion, producing pressure that worsened Monday with news that May general fund collections were $108 million below estimates.
As he left the hearing, Joe Scarnati, R-Jefferson and Senate president pro tem, said Internet gambling should be considered as a potential revenue source, calling it "a lot less painful than some of the other choices that are going to be out there."
Sen. Robert Tomlinson, R-Bucks, a leader of the effort to allow slot machines in Pennsylvania, said that before deciding on online gambling he would want to ensure that casinos would not be harmed and that protections would be enacted for problem gamblers. But he said the testimony had convinced him the potential state revenue for next year is not enough to rush a system into place.
"If you look at the revenues that we're talking about, they're so insignificant to this budget I don't really see it as being ... imminent -- something that we're going to do in the next 28 days," Mr. Tomlinson said. "I think that we need to proceed more cautiously than to just jump in."
Gov. Tom Corbett has expressed concerns about expanding gambling, especially with the prospect of minors and people with gambling problems accessing online games, said spokesman Jay Pagni.
Steve Miskin, a spokesman for House Republicans, said Internet gambling is "not yet even on our radar screen," and Bill Patton, a spokesman for House Democrats, said members need to see more details.
Pennsylvania legalized casino gaming in 2004, and the first casinos opened two years later. There are now 12 casinos in the state, with the prospect of additional licenses, including one in Lawrence County.
Mr. Mullin said Econsult found that allowing Internet gaming would be more likely to help than hurt casinos.
Several representatives of Pennsylvania casinos sounded receptive to online gambling, provided it was tied to existing casinos. A representative of Las Vegas Sands Corp. disagreed, saying it would be nearly impossible to prevent minors from playing.
William Ryan, chairman of the Pennsylvania Gaming Control Board, asked that any legislation require a full year before online gambling would become legal.
New Jersey, Delaware and Nevada now offer online gambling.
With offshore sites already attracting U.S. customers, Adam Ozimek, director of research and senior economist for Econsult, said the only choice is between legalized online gambling and the offshore version.
Karen Langley: email@example.com, 1-717-787-2141 or Twitter @karen_langley.