The saying “when one door closes, another opens” could reasonably be used to describe the current status of multi-state online poker in Pennsylvania.
Days after his multi-state poker bill was excluded from the state budget, Rep. George Dunbar (R-Jeannette) said he’s looking into possibly getting his bill attached to another one — a bill to start regulating and taxing skill games in the Keystone State — and use the proceeds to fund public transportation in the Philadelphia region.
Skill games currently operate in a legally gray area. So far, state courts have agreed to let the games continue to operate.
A skill games bill would be controversial because land-based casinos — and the skill games industry — have lobbied hard against one. But absent any other gaming legislation, Dunbar thinks attaching his bill, HB 2078, as an amendment to a bill that calls for regulating and taxing skill games could be his best option.
HB 2078 is a short bill that calls for Pennsylvania to join the Multi-State Internet Gaming Agreement (MSIGA), a multi-state compact for online poker. Dunbar introduced the bill last March.
“I do know that the governor’s attention was to have dedicated funding for SEPTA [the Southeastern Pennsylvania Transportation Authority],” Dunbar told Poker Industry PRO in an exclusive interview. “That was supposed to be taken care of in this year’s budget — the idea was we’ll pass skill games legislation and the revenue from skill games we’ll give to SEPTA.
“We didn’t do skill games and we haven’t funded SEPTA — we funded them a little bit — so there is a motivation that something has to be done. If it does go in that avenue, of skill games for SEPTA, that will present an easy opportunity just to add it to the skill games bill.”
MSIGA currently includes Delaware, Michigan, Nevada, New Jersey, and West Virginia. Operators in MSIGA states are allowed to combine their player pools. The resulting shared liquidity leads to bigger tournaments, bigger prizes, more tax revenue, and more excitement for online poker.
Pennsylvania’s inclusion in MSIGA would have likely touched off a fresh round of network combinations, with operators taking advantage of a player pool that ballooned to 38.3 million, up from 29.5 million with just the five aforementioned states.
Original Plan Didn’t Work Out
Dunbar had originally hoped to get HB 2078 attached to a code bill, which lawmakers use to outline how the state should spend money in the General Fund.
Ultimately, the $47.6 billion budget that Democratic Governor Josh Shapiro signed on July 11 did not include Dunbar’s bill. The Republican said plans to attach HB 2078 to a code bill fell apart when lawmakers hesitated on regulating and taxing skill games — especially since the Pennsylvania Supreme Court has yet to rule on whether skill games should be legal.
“The governor had proposed in his budget in February the taxation of skill games,” Dunbar told PRO. “If there was going to be legislation in the gaming arena, it would have been a lot easier to get something in the code bills on that. But since nothing happened with gaming, there was no motivation.”
Shapiro had proposed taxing skill games at 42%, and his administration said skill games had the potential to generate $150 million in tax revenue in its first year.
“He’s somewhat aware of gaming,” Dunbar said of the governor. “He’s looking at skill games as a revenue source. Although the multi-state poker agreement isn’t going to produce nearly as much revenue, it still does produce revenue without doing anything really, other than striking a pen.”
Sponsor Says Odds of Bill’s Passage 50/50
Dunbar’s “striking a pen” comment touched on the other two ways that the Keystone State could become a member of MSIGA:
- Governor Josh Shapiro could issue an executive order to that effect
- HB 2078 could win passage and be signed into law by Shapiro
When asked what he thought the odds for passage were, Dunbar said it was tough to say.
“I was told there were things that were supposed to be part of a budget package that were undone — one of them being skill games,” Dunbar said. “So, if we go anywhere into gaming it presents an opportunity to add the multi-state agreement to a skill games bill as an amendment, as opposed to running [HB 2078] itself.
“I’m not saying that’s going to happen, but barring running [HB 2078] straight up itself, that’s the other alternative. I guess I would say 50/50 [odds].”
HB 2078 remains an active piece of legislation that is still before the House Gaming Oversight Committee, which currently has no meetings set.
What Happened in Harrisburg
The Pennsylvania General Assembly is required by statute to complete passage of the budget by June 30. The state missed that deadline for the third consecutive year in 2024.
HB 2078 is not a controversial piece of legislation. At two pages in length, it merely authorizes the Pennsylvania Gaming Control Board (PGCB) to request the state’s membership in MSIGA. The bill did not represent an obstruction to bipartisan passage of the state budget.
After lawmakers missed the June 30 deadline, media reports said budget talks were running late into the night. They ultimately broke the deadlock and compromised on spending for K-12 education, public transportation, and economic development, among other things.
Dunbar had said he would push for HB 2078’s inclusion into a code bill. Since Pennsylvania will make more tax revenue from online poker after the state joins MSIGA, Dunbar’s plan was to tack HB 2078 onto a code bill during the budget negotiation process. He indicated that he had the support of key Democrats to make that happen.
That calculus appeared to change after June 30, at which point the budget was late. In the end, lawmakers appear to have exhausted themselves arguing over bigger issues like K-12 funding and didn’t want to spend any more time debating things like multi-state online poker — an issue of marginal interest to most lawmakers, at best.
What Happens Now
Even though HB 2078 doesn’t appear to have been included in the budget, this isn’t the end of the line in the effort to #GrowPApoker. There are still two pathways for Pennsylvania to gain membership in MSIGA in short order.
The bill is one of 20 pieces of active legislation before the House Gaming Oversight Committee. While the committee doesn’t currently have any meetings scheduled, it will likely have to schedule a meeting in the coming months to handle what has become a backlog of bills before the panel.
Democrats control the state House of Representatives, so their support on the gaming oversight committee and the full chamber are of paramount importance. But Dunbar is seen by both parties as the House’s resident expert on gaming matters, and so passage appears to have decent odds.
Shapiro would need to sign HB 2078 in order for it to become law. Dunbar and others believe the Democratic governor supports the bill and would sign it.
The second pathway to the Keystone State’s membership in MSIGA involves just Shapiro — the governor could issue an executive order for PGCB to request the state’s membership in the compact.
While this has been considered the easiest pathway for Pennsylvania to join the compact, an executive order was also considered the least likely. That’s because of many competing priorities for the governor, including the upcoming presidential election.
