Pennsylvania is counting on millions more for its budget from thousands of more slot machines — and doing it by rising gambling opportunities in multiple ways. It is already the biggest collector of state revenue from casino gambling in the United States.
Governor Tom Wolf, on Thursday, helps to balance the 2017-18 budget that will give Pennsylvanians a first-time opportunity to bet legally over the internet, at a truck stop, and at an airport. And if someone prefers a more traditional casino but finds the drive too far currently, they may soon have their choice of 10 new “satellite” operations to be placed in areas at least 25 miles from the 12 bigger ones that already exist.
The state that legalized slot machines in 2004 and added table games in 2010 — developing a combined $1.4 billion annually for the state at present — is doing virtually everything it can to tap that well more deeply. The Pennsylvania Lottery is also to be given a chance at greater sales by offering its games online.
“This is one of the most aggressive gambling expansion bills we have ever seen after the initial launch of casino gambling in any state,” said Joe Weinert, executive vice president of Spectrum Gaming Group, who has tracked Pennsylvania’s casino industry closely since inception.
About the only type of expansion Pennsylvania lawmakers refused was the goal by bars, taverns and other liquor-license holders to host legal video poker or other slot machines. That spread is deeply opposed by the casino operators, who invested hundreds of millions of dollars each in the construction of their facilities.
Now it will be up to those same casinos to decide to what degree they want to act upon expansion opportunities under the legislation. The measure gives them options of paying one-time license fees that could amount to $7.5 million to add a mini-casino or $10 million to operate poker and other casino games over the internet.
States differ vastly in how they legalize gambling and Pennsylvania would become even more different from most of the legislation.
Three states — Delaware, Nevada and New Jersey — have already adopted internet gambling, in which people can play games like those in the actual casino. Analysts say they predict more to collapse that path, even though revenue from it has mostly fallen shy of advance estimates because it appears to attract a different type of customer from the one visiting casinos.
“Some operators in New Jersey say it is not cannibalizing but growing their bricks and mortar business” through marketing tie-ins, said Alan Meister, an economist and gaming analyst for Nathan Associates Inc. “It appeals to a younger, more tech-savvy crowd rather than traditional slot customers.”
Each of the existing casinos could add a satellite casino with up to 750 slot machines plus table games. Presently, casinos can have up to 5,000 slot machines, although none has the maximum — the Meadows and Rivers each has about 3,000, which provide the bulk of their revenue.
Mr. Weinert said lawmakers appeared to have focused on preserving the chance for existing casino operators to make money from the expansion, rather than being harmed by it.
Truck stops that meet certain requirements — such as minimum thresholds for truck parking and gasoline sold — could have up to five video lottery terminals, which are like slot machines. There is also a provision permitting casino-style machines at airports, with an operator required to pay $1.25 million for a license at Pittsburgh International Airport.
“I have got to believe that there is a limit as to how much we are going to achieve from gaming, and I do not know whether we have reached that or not,” said House Minority Leader Frank Dermody, D-Oakmont. “I guess we are going to see.”