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Payne Trashes Opposition to Internet Gambling in PA

Posted on by Tim Hernandez

PennsylvaniaRepresentative John Payne has destroyed John Shea´s public opinion that Internet gambling in Pennsylvania would cannibalize the state´s casino industry.

At the end of June, Tim Shea – the President of the Pennsylvania Horsemen’s Benevolent and Protective Association – had a letter published on Pennlive.com in which he expressed concerns that the introduction of Internet gambling in Pennsylvania would cannibalize the casino industry.

Shea´s motives for publicly speaking out against the introduction of Internet gambling were that a proportion of slot revenues from racetrack casinos currently go directly to the Race Horse Development Fund to develop growth in the state´s horse racing industry.

Since 2004, the “Fund” has received $210 million, of which approximately 89% has been redistributed into the local economy – a local economy which contains a significant proportion of members of the Horsemen’s Benevolent and Protective Association.

Shea believes that 27% – 30% of the fund´s revenues could be wiped out due to cannibalization of the casino industry by Internet gambling, and he supports his argument with a “recent” study published in the University of Nevada Las Vegas Gaming Research and Review Journal.

A Genuine Concern or a Pitch for More Money?

Inasmuch as Shea may be genuinely concerned about the members he represents, it was noticeable that he wrote as currently written SB900 would allow Internet gaming to bypass this fund – hinting that he would withdraw his objections to Internet gambling in Pennsylvania if the Race Horse Development Fund was to get a slice of the pie.

Shea´s organization would not be the first to pitch for more money. Last month we reported on how Pennsylvania´s Department of Drug and Alcohol Programs gave such a convincing performance at an i-gaming hearing of the Senate Community, Economic and Recreational Development Committee that the committee chairman simply asked them how much money they would like.

Previously the Parx Casino in Bensalem, PA, has insisted that players register in person for online accounts at brick-and-mortar casinos in order to strengthen the relationship between online poker players and the casino, while the over-spending politicians in PA are calling for a 54% tax rate on gross gaming revenues to fill a massive hole in the state´s budget.

Payne Fights Back – Argues that Shea´s Opinion is Out of Date

In response to John Shea´s letter, Representative John Payne – author of Pennsylvania´s first i-gaming Bill this year (HB649) – wrote to the Republican Herald. In his letter, Payne accused Shea of using an out-of-date and irrelevant study to support his opinion.

Payne wrote that the study Shea was basing his argument on came from research conducted in 2012 and focused on offshore, unregulated online gambling. In a more recent study conducted earlier this year on the effects of regulated gambling on the casino industry, the author of the 2012 report acknowledged that there was a distinction between regulated and unregulated online gambling.

Payne claims that the updated study found a robust complementary (positive) relationship between online and offline gambling and that the author ended his report by concluding:

[I] suggest that economic concerns around the cannibalization of traditional gambling industries should be reconsidered, and provide support for prior research showing that Internet based firms can be complementary to brick-and-mortar businesses.

Payne finished his letter to the Republican Herald by stating that regulated Internet gambling would be good for Pennsylvania – and the Pennsylvania horse racing industry – for many reasons. He said that regulation would drive illegal operators out of the market – preventing millions of dollars of revenue from leaving the state – it would protect problem gamblers and those too young to bet on the Internet, and would generate more money (rather than less) for the beneficiaries of the tax revenues generated by the state´s brick and mortar casinos.

2 comments on “Payne Trashes Opposition to Internet Gambling in PA”

  1. […] preventing underage gambling, but he has also overcome opposition from certain elements within the horseracing and casino fraternity who fear the cannibalization of their respective […]

  2. […] Subsequent events have dampened that optimism. Despite being seen as a partial solution to the state´s budget deficit, lawmakers have been slow to embrace Payne´s proposals for online gambling. A couple of positive hearings have failed to develop into anything of substance, and cracks have appeared in the support Payne believed he had to drive his proposals through – notably from the horseracing and casino industries. […]

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