The state House and Senate are waging another high-stakes battle over how to expand gambling options to generate desperately needed tax revenue and fix a constitutionally flawed casino law municipalities rely on for extra cash.
And if the battle turns out like last year, everyone could go home broke.
Last June and into this year, the two chambers have failed to compromise on additional ways to gamble even though the current budget anticipated $100 million in new revenue from those options. Lawmakers also have missed court-ordered deadlines to fix a part of the state's 2005 casino law the state Supreme Court justices deemed unconstitutional because it did not set "uniform" taxes for each casino as it relates to $142 million in host fees they pay nearby communities.
That history could be repeating.
On Wednesday, the Republican-controlled House, with Democratic support, voted to alter a Senate bill that not only addressed the host fee problem, but also welcomed new gambling options — wagering online, buying lottery tickets over the internet, and playing fantasy sports from home or while waiting in an airport.
Wednesday afternoon, the House Rules Committee voted 23-6 to amend the Senate bill so it also would legalize 40,000 video betting machines in bars, nursing homes, VFWs, volunteer fire halls, restaurants, bowling alleys, truck stops, hotels and other places licensed to sell alcohol. The machines, known as video gaming terminals, or VGTs, are strongly opposed by all but one of the state's casinos and a majority of the Senate for fear the market will be oversaturated, diluting profits and state gambling tax revenue.
"That many machines added to the market would definitely have an impact on casinos," said John Cunnane, a Wall Street gaming and leisure analyst for Stifel Investment Services.
At about 9:20 p.m., the full House rolled the dice anyway, voting 102-89 to approve VGTs. All but one of the Lehigh Valley's 11 representatives voted against the bill.
The bill now moves to the Senate. If it dies there, it could leave a $150 million hole in next year's budget. That's how much Gov. Tom Wolf's administration has projected in estimated tax revenue from expanding gambling in the fiscal year starting July 1. A failed bill could also jeopardize the host fee fix, leaving municipalities like Bethlehem and Allentown in a financial lurch.
The Senate Republican caucus will review the bill, said Jenn Kocher, spokeswoman for Senate Majority Leader Jake Corman, R-Centre.
Wolf's administration did not take a position on the House's changes.
"The governor is committed to continuing to work with all four caucuses to reach consensus on a gaming proposal," spokesman J.J. Abbott said. "As he has stated previously, this solution must protect jobs, programs and relief for seniors, and include real, recurring revenue."
The possibility of a fight over the gaming bill also comes as the state is facing a $3 billion deficit. That deficit is so steep, the state may not be able to borrow money from the Treasury to prop up the budget as it has done in recent years, according to warnings issued earlier Wednesday by Treasurer Joe Torsella and Auditor General Eugene DePasquale.
It could be a long, passionate Senate debate if the two-hour House floor debate is any indication.
"This legislation is bad legislation," Rep. Stephen Kinsey, D-Philadelphia. "These machines could possibly be in every single neighborhood."
The online component of the bill is socially irresponsible, said Rep. Scott Petri, R-Bucks, chairman of the House Gaming Oversight who lost a bid to postpone the vote. "If you vote to pass this bill, you're forcing everyone in your communities to have VGTs," Petri said.
The bill's main sponsor, Rep. Mark Mustio, R-Allegheny, said when he is old enough he hopes the nursing home he enters has VGTs available for him.
His lead co-sponsor, Rep. Mike Sturla, D-Lancaster, added that bars and other places are already operating illegal machines and the bill allows the state to begin taxing it.
"We have 40,000 illegal VGTs that exist," he said. "About time we finally regulate and control it and get some dollars for the citizens of Pennsylvania."
The Pennsylvania Tavern Association strongly supported the bill.
Eleven of the state's dozen casinos opposed it, including Sands Casino Resort Bethlehem.
This week Sands launched a $1 million advertising campaign to stop VGTs. The campaign, by a Sands-funded lobbying group called Pennsylvanians For Responsible Government, includes an online landing page, radio ads and 30-second television spots telling people state lawmakers want to "create over 12,000 casinos" across Pennsylvania. The ad also warns that slot machines can be placed in nursing homes with liquor licenses, of which there are 35, including Phoebe Nursing Home in Allentown, Kirkland Village in Bethlehem and Morning Star Senior Living in Nazareth.
Sands Bethlehem, perhaps more than any other casino in the state, has much to lose if VGTs are legalized — and according to sources, it already has. Parent company Las Vegas Sands Corp. had a tentative deal to sell the complex to MGM Resorts International for $1.3 billion. However, sources said, MGM pulled out of the deal in part because of the threat of VGTs.
The only licensed casino that wants VGTs is Penn National Gaming, owner of Hollywood Casino in central Pennsylvania. Penn National has a video gaming wing already operating in Illinois and hopes to expand that business to Pennsylvania.
The House amendment would charge licensing fees of $50,000 to VGT manufacturers and suppliers; $25,000 to companies that operate the machines and $100 to any place that hosts them. The tax rate then would be 37.5 percent on revenue generated from the machines, with most of the money going to the state and smaller percentages going to counties and municipalities. The amendment did not list a corresponding revenue estimate from the tax rate.