Pennsylvania’s revenues have significantly dropped over the past few months due to the COVID-19 pandemic, which led to widespread casino closures and a lack of sports to buoy the emerging sports betting industry.
Currently, only online gambling is generating tax revenue for Pennsylvania, which has spurred lawmakers to expand gambling in the state as a way of increasing earnings.
The gambling expansion is being sold to state residents as a way of helping the entire gambling industry—which employs thousands and contributes millions of dollars to the state per year—to recover.
Lawmakers are currently looking at a number of gambling expansion possibilities. One issue being debated on is the legalization of video gaming terminals (VGT) in venues other than truck stops, where the machines are currently limited to. The presence of skill gaming terminals (SGT) in non-traditional gambling venues are also being examined, such as restaurants and bars.
Proponents of the expansion state that the machines could help small businesses recover. The low cap of $5 per bet is also being touted as a way of ensuring that the machines do not contribute toward problem gambling.
Giant casino operator Penn National Gaming (PNG) has spoken out against this proposed expansion. According to Eric Schippers, the senior VP of public affairs and government relations for PNG, their stance is that gambling expansion would saturate the state’s gaming market and jeopardize the earnings of current operators.
Experts Believe VGTs and SGTs Would Help Casinos
However, industry experts noted that Schippers’ argument may be self-serving. In Las Vegas, where real money slot machines are located at almost every retail venue, the casino industry continues to thrive.
Experts also believe that the wagering limit of $5 on VLTs and SGTs will target a different segment of the market than casinos, notably casual punters looking for a quick spin while having dinner or drinks. These casual punters may not step foot inside a casino.
Gamblers who are more used to the casino environment with its multiple perks, will likely not substitute their casino time with VLTs and SGTs. What will likely be the case, according to the experts, is that VLTs and SGTs will create a new market rather than cannibalize the existing casino market in Pennsylvania.
SGTs are currently unregulated in the state, despite its presence in different venues. Industry experts argue that legalizing and regulating them will help Pennsylvania increase its revenues while helping the casino industry expand its market, as SGTs could serve as a stepping stone for younger punters to play casino games.