Regulation, not revenue, should drive Pa.’s motivation for gaming
The revenues Pennsylvania collects from regulated gambling are nothing short of impressive. Amid difficult budget years, legislative leaders often look at these numbers and think that gaming expansion, especially online gaming, or iGaming, is the solution to all of our state’s budget needs.
I understand the impulse, and don’t get me wrong – there is definitely revenue to be had through expanded opportunities like iGaming. But, in my opinion, the revenue projections related to expanded gaming for this budget year is irrelevant when it comes to the real goal: keeping Pennsylvania competitive while focusing on protecting our state’s citizens.
That is why I have been one of the leading proponents for a detailed, comprehensive and focused gaming bill that puts regulation, not solely revenue, at the forefront of the discussion. Specifically, when it comes to legalizing iGaming in the commonwealth.
The debate around iGaming is not about whether we finally allow it to exist within our borders – because the reality is, it’s already here. iGaming exists in Pennsylvania, just in the shadows of an unregulated space.
For me and many of my colleagues, regulating iGaming is the only way to truly rein in black market, off-shore operators that prey on problem and compulsive gamblers, and could care less about protecting against underage gambling.
Many advocates outside of the gaming industry have made the plea to elected officials to regulate online gaming – specifically, to address underage and problem gambling.
One of the leading online child advocacy organizations in the country, Wired Safety, has testified before the Pennsylvania House or Representatives and Congress, supporting iGaming regulation by the states because they believe “absent of regulation, consumers and families are on their own” to deal with the consequences.
The bill we passed last week provides the needed regulation to give families and consumers the tools to protect against the very real and present dangers of unregulated iGaming, including ways to limit underage gambling, improve privacy and data protection, eliminate criminal involvement, and address online security threats to children.
In addition, over the last several years, the National Council on Problem Gambling and the Council on Compulsive Gambling of Pennsylvania have publically stated that a regulated iGaming environment should adopt strong standards to protect the vulnerable, and that a portion of revenues derived from iGaming must go toward treatment programs.
The bill we passed last week provides strong standards that address problem gambling, and provides millions of additional dollars for treatment programs.
There are also concerns that iGaming could have a negative impact on our current “brick-and-mortar” casinos – the very facilities that have put Pennsylvania on the map as the second-leading gaming state in the country.
But if we look to New Jersey, we can see that iGaming has provided a synergy for their struggling casinos – as marketing and cross-promotion opportunities have grown attendance at their land-based facilities.
In fact, iGaming has opened the door – literally – to a new segment of the gambling population that would not have visited a land-based casino. Recent studies have shown that iGaming has a complementary, not cannibalistic, effect on the brick-and-mortar establishments. In 2015, roughly 75 percent of online gaming accounts created in New Jersey were established by new or inactive players. And one New Jersey operator highlighted that 15 percent of these new or inactive players then visited one of the company’s New Jersey, land-based casinos.
Pennsylvania’s regulatory structure is one of the strictest in the country. It has become a model for other states and nations that wish to get gaming up and running from scratch. And our focus has always been to ensure the integrity and sustainability of our regulated gaming industry.
That should be our primary aim again – and our primary focus in passing a strong and viable gaming bill. We cannot be focused solely on revenue, and ignore the compelling evidence as to why gaming expansion is necessary.
We need regulation, and we need it now.
State Rep. Rosita C. Youngblood represents the 198th Legislative District and is the Democratic Caucus Secretary.