In January of 2016, the National Conference of State Legislatures (NCSL) published a list of the top ten issues that will be before state legislatures across the nation this year. Since Pennsylvania will close out the 2015-2016 session this fall, it’s worth a look to see what our own elected officials are doing to address each of the issues. The third topic up for consideration: Regulating Fantasy Sports.
It’s estimated that Americans will spend up to $26 billion dollars participating in fantasy sports tournaments in 2016 alone. How and whether fantasy sports tournaments should be regulated largely centers around whether participation therein is considered gambling or a game of skill. Public officials in Pennsylvania have evidenced some interest in legalizing and regulating fantasy sports, as well as other gaming expansions, in an effort to generate much needed revenue to plug the Commonwealth’s ever-growing budget deficit.
During the 2016-2017 budget debate, expanded gaming proposals were bandied about as part of a broader discussion on how to balance the state budget for the fiscal year. Indeed, over the course of the last session, expanded gaming proposals running the gamut have been introduced; we’ve seen bills to legalize slots at airports and off-track betting sites, to allow internet gaming, to allow video gaming terminals in our bars and taverns and, of course, to allow traditional and fantasy sports betting.
Complicating the issue here in the Commonwealth is the fact that Pennsylvania is a largely agricultural state and boasts one of the best horse racing programs in the nation. When Pennsylvania legalized slot machine gaming in 2004, it was stated in the bill that the intent was to positively assist the Commonwealth’s horse racing industry, support programs intended to foster and promote horse breeding and improve the living and working conditions of personnel who work and reside in and around the stable and backside areas of racetracks. Expanded gaming options that chip away at this intention are often met with opposition from the industry, racing fans and legislators alike. This is not to mention the opposition from the state’s relatively new casino industry, which fears that expanded gaming will chip away at their bottom line.
In February, the legislature passed H.B. 941 (Regan, R-Cumberland), which, among other things, directed that the Pennsylvania Gaming Control Board conduct a study and prepare a report on the effect of fantasy sports on the Commonwealth’s gaming industry. In June the full House of Representatives adopted H.R. 619 (Matzie, D-Beaver), a resolution urging Congress to lift the federal ban on sports gaming in all forms, including fantasy sports.
PGCB’s report, published this week, is available here:
http://wallaby.telicon.com/PA/library/2016/2016080389.PDF
Rep. George Dunbar (R-Westmoreland) also attempted to advance the issue. His H.B. 2150, as introduced, would have required fantasy sports contest providers to be licensed and regulated by the Gaming Control Board. The measure passed the House of Representatives in June, but not before it was bogged down with over 250 pages of amendments to legalize other gaming expansion measures. That bill is now before the Senate Community, Economic and Recreational Development Committee for consideration. Additionally, Sen. Tony Williams (D-Philadelphia) introduced S.B. 1324, similar to Dunbar’s fantasy sports bill as introduced. That measure is still before the Senate for consideration.
It’s hard to gauge what the outcome will be on the regulation of fantasy sports betting in Pennsylvania. This year’s state spending package assumes $100 million in new revenue from internet gaming and fantasy sports in order to have a balanced budget for the 2016-2017 fiscal year, even though no legislation has been passed to date. However, any gaming expansion bill up for consideration could attract an array of amendments and put an all-or-nothing proposition before the General Assembly in the fall. We’re not ready to take odds on the outcome just yet.