The Next Three Months Will Be Critical for US Online Gambling
The Next Three Months Will Be Critical for US Online Gambling

Pennsylvania and Michigan could still find a way to regulate online gaming in 2016

The future of online gambling in the United States could very well be decided between now and the end of the year. The country isn’t at a make-or-break point, but with no state legalizing online gaming in over three years, any chance at widespread online gambling legalization by 2020 is slowly slipping away.

On the other hand, if one or both of the states where online gambling legalization is still very much in play can get a bill passed this year, we could see several other states follow suit in 2017, creating the widespread legalization that seemed like a foregone conclusion back in 2013, when Nevada, Delaware and New Jersey all launched legal online gaming sites.

What states are still in play?

In Pennsylvania, the legislature is on the precipice of passing a bill legalizing online gambling. The Pennsylvania House of Representative passed the bill back in July, and both chambers have included online gaming revenue from the bill as a funding source for the state budget. But nothing is a slam dunk, and as is often the case with any legislation that is seen as an expansion of gambling, the final nudge across the finish line is the hardest and most frustrating.

As Happy Gilmore would say:

At the same time, online gambling legislation in Michigan has been flying under the radar and quietly biding its time. This isn’t surprising considering the bill’s sponsor, State Senator Mike Kowall has said action is unlikely until after the November 8 elections.

Here’s a closer look at where both states stand.

Pennsylvania

The Pennsylvania question – is this really the year or is it just another case of Charlie Brown falling for Lucy’s tomfoolery – should be answered over the course of the next two weeks. However, it’s not out of the question that online gambling could drag into November or December if the Pennsylvania legislature hasn’t passed a bill to fix the local tax share the state Supreme Court recently ruled unconstitutional. If this occurs the legislature could add session days in November or December.

If the tax share issue is solved, and online gambling isn’t addressed at the same time, the legislature will need to start over in 2017, although the foundation for the bill, and the impetus for it (a funding source for the budget) will already be in place.

Dragging into 2017 isn’t a death knell, but the hope among online gambling supporters is the legislature will use the urgency of the tax share fix (the Pennsylvania Supreme Court gave the legislature until the end of January to solve the issue) to deal with online gambling, and that the two issues will be solved together.

This is something House members seem to favor, while the Senate is more wishy-washy on the best way to deal with both of these issues.

Also of note, the Senate is apparently trying to decouple daily fantasy sports from online gambling.

I was told this summer that the separation of online gambling and DFS would be a bad sign for online gambling’s 2016 chances. It’s unclear if the House has the votes to pass a standalone DFS bill without online gambling legalization.

Michigan

Michigan burst onto the scene as a potential candidate for online gambling legalization this summer, but all along State Senator Mike Kowall, who is pushing for the legalization of online gambling and sponsored the state’s iGaming bill, has been tamping down expectations until after the elections.

Despite its inaction, there have been several breadcrumbs dropped in the past couple months that would seem to indicate online gambling is still very much on the table in Michigan.

On September 1, Amaya’s Jeanne David, who runs the company’s responsible gaming department, tweeted out that the company gave a Michigan Senator (almost certainly Mike Kowall) a tour of its New Jersey operation.

A couple of weeks later, on September 14, Gambling Compliance’s Chris Krafcik tweeted out that “substitute iGaming bill lingo” was in the works; a bill that would fix a couple of structural issues with the original bill.

The final breadcrumb was dropped this week when Brian Pempus reported that Senator Kowall’s office stated there is “plenty of time” to get the bill passed this year.

Per Pempus’ reporting:
“Lawmakers are meeting this week and will come back in November to try to finalize a plan. There are also session days in December.”

Upshot

2016 isn’t the end of the road for online gambling in the United States, but the longer we go in between legislation, the harder it becomes to reach a point where legal online gambling is available in the majority of the country.