Pennsylvania Budget Crisis Keeps Online Gambling Hopes Alive, Michigan Introduces Bill

The Pennsylvania legislature is back in session this week, as lawmakers reconvene to resume squabbling about an ever-elusive budget agreement that could, eventually, legalize online gambling.

Urgency is growing, though, as the state could go broke on Friday for the first time in its history.

Treasurer Joe Torsella and Auditor General Eugene DePasquale have warned that Pennsylvania does not have enough money to pay $860 million in bills due by the end of the week, and neither seems in the mood to authorize another short-term loan to give the State House an extension on its Friday deadline.

The legislature passed a $32 billion budget bill in June without an accompanying plan to pay for it. In late July, the Senate approved bipartisan budget funding bills that included, among other things, $200 million in revenues from online gambling.

Having failed to come up with a workable budget plan of its own, the GOP-dominated House rejected the Senate plan and went on vacation for the rest of the summer.

This week, the House returned with a fiscally conservative, Republican-backed plan that makes no mention of online gambling. The so-called “Taxpayers Budget,” which has been widely mocked, proposes siphoning funds from a range of accounts earmarked for the development of transit, ports, rails and infrastructure.

After previously pushing the state House to “r,” Pennsylvania’s Democratic Gov. Tom Wolf has branded their latest idea “nonsense.” A vote on the plan scheduled for Tuesday did not materialize.

Meanwhile, if GOP House leaders are going to include gambling in an eventual budget plan, they favor a package that would include the authorization of video gaming terminals (VGTs) in bars and restaurants.

But while the Republican-led Senate can possibly stomach online gambling, it finds VGTs unpalatable, which suggests is a long way away from consensus.

Nevertheless, Pennsylvania remains the state most likely to legalize and regulate online gambling next, if the state’s fiscal cliff somehow pushes disparate gambling interests together.

Meanwhile, Michigan could be the next state to give online gambling legalization a whirl. On Tuesday, State Rep. Brandt Iden introduced H 4926, which is due to be heard by the House Regulatory Reform Committee Wednesday.

The main obstacle for Michigan is the state’s mix of tribal and commercial gaming. Online gambling regulation must include tribal operators to have a chance at success, but to do that, Iden’s bill makes clear, would require tribes to renegotiate their compacts with the state.

Last year, a proposed that tribes would have to “renounce sovereign immunity” to be licensed, which was understandably unpopular and openly opposed by at least four tribal operators.