Legalizing Internet gambling, possibly through Pennsylvania's existing casinos, appears certain to be a topic of debate soon in the state Legislature after consultants told lawmakers Wednesday that allowing the state's residents to wager in casino-style games online would lead to more total gambling revenue.
Online gambling could generate another $307 million a year in gambling revenue in Pennsylvania, according to a report by Econsult Solutions Inc. of Philadelphia released Wednesday, an estimate that assumes that the state hits its goals and avoids the experience of New Jersey, which has fallen short of revenue expectations.
Senators commissioned a report in December to assess Pennsylvania's existing gambling landscape of 12 casinos and analyze the potential impact of online gambling at the casinos.
With the state government facing a $1 billion gap in Gov. Tom Corbett's budget plan, the report is expected to spark serious discussion about legalizing and taxing online gambling in the next two months.
Senate Majority Leader Dominic Pileggi, R-Delaware, said he had not taken a position on whether to legalize online gambling. But, he said, members of the Legislature are interested in it and it "deserves a serious look."
In a statement, Senate President Pro Tempore Joe Scarnati, R-Jefferson, was more emphatic, saying "authorization of online gambling in the state will be explored."
Econsult was asked to assume that any online gambling in Pennsylvania would occur through the state's existing casinos. The extent to which online gambling would simply take away the customers who gamble at the casinos is small, Econsult said.
One reason for that is online gambling typically allows smaller bets and caters to younger gamblers, suggesting that it would attract new gamblers and creating a new pool of people to attract to casinos, Econsult said. The consultant did say, however, that studies on the relationship between online and offline gambling are extremely limited.
Bipartisan legislation introduced in Congress would ban online gambling, although the bills' prospects are not clear.
The measures are aimed at reversing a 2011 decision by U.S. Attorney General Eric Holder that a 1961 law used in recent years to curb Internet gambling only barred sports betting. As a result of the decision, New Jersey, Delaware and Nevada have allowed online gambling.
Meanwhile, legislation to legalize online gambling has been introduced in at least eight states, including Pennsylvania, according to information from the National Conference on State Legislatures.
In March, Morgan Stanley forecast that a U.S. online gambling market would be worth $8 billion in revenue by 2020.
The fledgling Internet gambling industry is growing, but not as fast as many had hoped. New Jersey Gov. Chris Christie initially estimated it would bring in $1 billion in its first year, but his state treasurer recently acknowledged the numbers are coming up far short of that estimate. Wall Street analysts expect online betting to bring in about $200 million in its first year in New Jersey.