EDITORIAL: House gambling bill isn't sure bet
- A bill allowing expanded gambling was passed by the Pennsylvania House.
- The bill would regulate and tax fantasy sports companies and permit online gambling.
- The bill also would allow slot machines at airports and OTW parlors.
Like it or not, gambling and human civilization go hand in hand.
It's an activity that's likely existed since the very dawn of man. In fact, the earliest evidence of gambling dates to 2,300 BC in ancient China. Now, 4,500 years later, gambling is more popular than ever.
It should come as no surprise, however, that government has long tried to regulate — and sometimes profit from — the activity.
After all, some view gambling as a wicked vice, while others look at it as a harmless diversion. As a result, our legislators are perpetually walking a tight rope in an effort to please both constituencies.
Here in Pennsylvania, over the past few decades, the pro-gambling supporters seem to be winning.
Our state now permits a wide array of wagering opportunities. There are lotteries, horse racing, casinos and games of chance at social clubs and some bars.
If you want to gamble around here, it's easy to find a nearby outlet.
If a recent bill passed by state House eventually becomes law, however, it will be even easier to fulfill your gambling fix.
By a vote of 114-85, the House moved legislation to the Senate that would:
►Regulate sports fantasy companies, such as FanDuel and DraftKings, that operate within the state.
►Allow licensed commercial casinos to offer gambling on websites and mobile applications.
►Permit slot machines at state airports.
►Give off-track-betting parlors the opportunity to operate slot machines.
►Allow casinos to offer sports betting, should it get the legal OK from federal courts or under federal law.
In all of the above cases, the government would profit from the expanded gambling opportunities, either through taxes or licensing fees.
Those taxes and fees, in some cases, would be quite high. For example, the fee to operate a gambling website would be $8 million, while the fee to install slot machines at airports or OTW sites would be as high as $5 million. The tax rate exacted by the state would be as high as 34 percent.
It's fairly obvious that the state legislators view this bill as a way to raise revenue without raising income or sales taxes.
This is nothing new. It's known as a sin tax. It's seen as a way to discourage participation in activities that some view as unsavory — such as smoking, drinking and gambling — while also profiting from those same activities.
At first blush, the latest bill, like most legislation, features both good and bad aspects.
The booming online fantasy sports industry definitely needs to be regulated and taxed, just like any other gambling activity that operates in the state.
And offering slot machines at OTW parlors seems harmless enough. After all, it's already a gambling facility. People are going there for one reason only — to gamble.
However, allowing casinos to offer online gambling and putting slot machines at airports seems like an unnecessary expansion of gambling. Unfortunately, there are a large number of addicted gamblers here in Pennsylvania. Offering them new temptations — either online or in airports — seems needless. Recovering addicted gamblers can avoid casinos, OTW parlors or social clubs. It's much harder to avoid an airport, a computer or a cell phone.
The idea of sports betting meanwhile, is probably best left to Las Vegas. Going in that direction could easily lead to point shaving or the outright throwing of games.
In addition, the legislation must be transparent about where the money will go. Will the cash go into the general fund budget, or it will be earmarked for specific projects or agencies? Also, it would be a good idea if at least a small fraction of the money raised would go to help addicted gamblers.
The bottom line, however, is this — the legislators should proceed cautiously and with serious thought. Previous laws that expanded gambling have not produced the projected revenue. In addition, expanding gambling into new venues will almost certainly hurt existing gambling operations.
One thing is clear. New gambling taxes and fees will not be an easy fix for the state's revenue problems.
Everyone knows gambling is not going to disappear. It's been around for thousands of years. We just need to proceed with great care when determining the proper role for the state government.