In 2004, federal authorities raided a small social club in Easton that was the center of an $8.4 million illegal video gambling ring.
In the years before and since that Fleas Club raid, state Sen. Lisa Boscola said Monday, illegal gambling has been occurring at social clubs, bars and other places across the Lehigh Valley and rest of Pennsylvania. That's why it's time for government to get in on the action by legalizing and taxing tens of thousands of video game terminals, she said.
"We need to legitimize this activity," Boscola, D-Northampton, said at a news conference in the state Capitol announcing a bill to create up to 35,000 legal video gambling terminals in the state. "It's been going on for decades in basements."
The bill is not yet written. But the bipartisan group of Democratic and Republican supporters are envisioning a jackpot of revenue.
The sponsors, led by Rep. Mark Mustio, R-Allegheny, and Sen. Guy Reschenthaler, R-Allegheny, say the bill would allow video game terminals at social clubs, VFWs, volunteer fire halls, bars, restaurants, bowling alleys, truck stops, hotels and other places that have a license to sell alcohol. Bars, restaurants and clubs would be allowed to operate up to five terminals, and truck stops and off-track betting sites could have up to 10 terminals. All terminals would be wired to the Gaming Control Board to monitor play.
Any licensed establishment found running an illegal machine would face a felony criminal charge and could lose its liquor license. Any company that sells or maintains the terminals would be prohibited from donatin campaign money to state politicians just as casino operators are barred from doing.
The state Liquor Control Board licenses 14,858 establishments for on-site drinking and each one could get terminals. That includes 670 in Lehigh and Northampton counties.
"Clearly not ever license or club is going to have machines," Mustio said at the news conference.
But enough places are expected to apply to create between 25,000 and 35,000 video game terminals, Mustio said. If projections hold up, Mustio said he estimates the state would generate $100 million in the 2017-18 fiscal year that starts July 1 and then up to $500 million annually. Of the total, all counties would split $50 million. Another piece of it would go to municipalities and $2.5 million would be set aside for gambling addiction programs.
The bill is sponsored by the Pennsylvania Tavern Association, a lobbying group.
But the bill's passage is no sure bet, even though it has bipartisan support in the House and Senate and there is the potential for new revenue to help close an estimated $3 billion budget deficit for next fiscal year.
A similar bill failed last year by a wide margin in the House because of fear that it would draw profits from the state's casinos, create too many outlets for addiction to thrive, and lead to a "Big Brother" atmosphere in social clubs and bars via the Gaming Control Board's oversight.
The new proposal already is opposed by 11 of the state's 12 licensed casinos, including Sands Bethlehem. The only casino that supports the bill, Penn National Gaming, owner of Hollywood Casino in central Pennsylvania, has a video gaming wing already operating in Illinois.
To get more casinos on board, the proposal would reduce the state's existing 54 percent slot machine tax by about 15 percent. It would eliminate one unused casino resort license and postpone an unused racetrack casino license for three years.
Source: The Morning Call