Add Casino Gambling Internet Url | Info » pennsylvania gambling legislation

Jul 10
19

pennsylvania gambling legislation

2010 seemed to have got off to a great start for Pennsylvanian gamblers back on January 7th, when under the auspices of Governor Ed Rendell both the Pennsylvania Senate and House finally got round to agreeing on a bill to legalize all gambling table games, including poker, in Pennsylvania State. The bill was duly signed and became law on that same day, with the prospect that by June 2010 casinos and other approved gambling premises could be operating under the new legislation.

Why did Pennsylvania decide to legalize table gambling?

The answer to that question wasn’t simply to allow Pennsylvania’s citizens to enjoy table gambling games like poker, comfortable in the knowledge that they weren’t breaking any laws. Unfortunately, the real reason behind the Pennsylvania suddenly deciding to adopt a more tolerant attitude to betting games like poker was purely in order to raise more taxes – yet another ‘hidden’ tax on the working man! Apparently the legislation should have been approved as early as October 2009, but some of the Republican politicians started to get cold feet about losing votes to the anti-gambling and conservative lobbies. However, and dare I make the pun, the die had already been cast as the projected tax revenues from the soon to be legalized gambling tables had already been factored in to the state budget – meaning that the legislation was either approved or the powers that be would have had to lay-off staff from state jobs.

What will legalized gambling tables be like?

The bill provides for 250 tables in premises dedicated to being a casino only and up to 50 tables in ‘resort’ casinos; which these days to all intents and purposes means those casinos that are on the premises of a hotel. Possibly acknowledging that not everyone carries great big rolls of cash around with them in these days of electronic cash, the casinos will be able to offer customers credit, which is a welcome move from the legislators. One important piece of information is that the tax levied on the table games will be 14% in the first year, reducing to 12% in subsequent years – and in the first 2 years alone around $650 million is expected to be raised in taxes from them. Needless to say the house rakes will also need to be taken into consideration by poker players and other table game punters, which will of course vary from casino to casino.

Court of Appeal poker ruling

The anti-gambling lobby and conservatives hadn’t given up all hope of reversing all of the above good work in legalizing table gambling in Pennsylvania. The fact that the Republicans were far from happy about endorsing table gambling in the state was highlighted when the senate leader Dominic Pileggi (Republican) went public announcing that if it wasn’t for the economic crisis they wouldn’t be needed to raise funds through gambling taxes anyway. So, following his comment that “If we we’re in a surplus situation, this discussion would not be happening”; it came as no surprise that the whole situation was nearly turned on its head in March. Following a review of existing legislation the Pennsylvania appeals court decided to rule 2:1 – that poker was in fact illegal in the state. Yes, you guessed it, the citation being that poker was a game of chance rather than one of skill. However, looking today at the Pennsylvania Gaming Control Board website it would appear that the preparations for expanding the provision of casinos with gambling tables, including poker, is continuing as license applications for casinos are still being heard. So, presumably the classification of poker games being illegal will continue to only apply to those games or tournaments outside of the newly licensed casinos.

New casinos to follow?

At present Pennsylvania has only three approved casinos not associated with a race track – Mount Airy and Sands at Allentown and Scranton in the east; and Rivers in Pittsburgh to the west of the state. This new legislation will surely open up the opportunity to introduce casinos across the state, rather than just in the main population centers. Likely contenders to benefit here are the tourist centers such as the Lake Erie destinations, the Dutch Country and the historic state capitol of Philadelphia.

The road to respectability

Siegel made the Flamingo into the first luxury hotel on the Strip in 1946. Today it is owned by Harrah’s, a listed company. the Strip’s northernmost casino, the Stratosphere, is the property of a Goldman Sachs affiliate. the Strip’s largest complex, made up of the Venetian, the Palazzo and the Sands Expo Convention Centre, is owned by the Las Vegas Sands Corporation, another listed company that has a $16.7 billion market cap.

Over the past half-century the city’s population has climbed steeply and steadily. Today nearly 2m people live in the Las Vegas metropolitan area—a testament perhaps as much to the miracle of modern air conditioning as to the irresistible allure of gambling. but whereas the 20th century was good to Las Vegas, the 21st may prove more perilous.

Following a brief attempt at reinventing itself as a family-friendly resort in the 1990s, it has now tried to return to its roots as Sin City; one of its more famous advertising campaigns promises that “what happens in Vegas, stays in Vegas.” it remains the only place in America where punters can legally bet on sports. Yet just as the rise of other forms of gambling threatens horseracing, so Las Vegas now faces competition from other venues. Native American casinos abound. and despite UIGEA, so do opportunities for online gambling.

The financial crisis has done its bit to make life harder. in may this year Nevada’s unemployment rate had climbed to 14%, the highest in any state and far above the national average of 9.7%. in 2008 hotel-casinos provided only 16% of the state’s jobs—nearly seven percentage points fewer than at the peak, in 1994. the state has tried hard to diversify, but gaming and tourism remain a big part of the economy, so the drop in consumer spending in the past two years has affected Nevada more than most other states.

The crisis hit at the end of a long period when visitor numbers were growing faster than the number of hotel rooms. in 2004 MGM Mirage announced plans for a massive complex on the Strip, CityCenter, to cash in on rising demand. the cost rose from an initial estimate of around $3 billion to over $9 billion. it opened in December last year, adding 4,800 hotel rooms to a city already struggling to fill the rooms it had. by the end of 2009 the number of visitors was down 3% from the previous year but room numbers were up 6%, slashing the occupancy rate. Equally alarming, gambling revenues in Nevada as a whole fell by over 10%, the state’s steepest-ever annual decline.

Much of this is due to the broader economic malaise, in particular the drop in consumer spending that accompanied the recession. but competition is also to blame. in 1987 the Supreme Court ruled that Native American tribes could establish gambling operations on tribal lands even if those lands lay within states that prohibit gambling. the following year Congress passed the Indian Gaming Regulatory Act, which created a framework of regulation for such businesses.

Today more than 200 tribes run casinos in 28 states, including Nevada and California (which supplies many of the visitors to Las Vegas). the biggest casino in America is Foxwoods, run by the Meshantucket Pequot tribe in western Connecticut; that and the Mohegan Sun casino, run by the Mohegans in Connecticut, are both around two hours’ drive from New York, and much of their business comes from day punters. the Pechanga Resort and Casino in Temecula, California, between Los Angeles and San Diego, is closer to both than is Las Vegas. in 2008 gaming revenue at Indian casinos was about $27 billion, a 1.5% rise on the previous year, whereas Las Vegas saw a drop. Proximity seems to make a difference.

in addition to this direct competition there are smaller foes, too. Around 15 states have “racinos”, or slots parlours attached to race tracks; and many of them offer video poker, blackjack or craps, which are computer-based versions of popular table games. the federal ban on sports betting outside Nevada is beginning to crumble at the edges: Delaware lost its appeal to allow sports betting but retains the right to take bets on multiple professional football games, and a New Jersey state-senate panel recently approved legislation to allow sports betting in Atlantic City.

Yet none of this may be as damaging to Las Vegas as it appears. For one thing, most people do not go there just to gamble: in 2009, only 13% of all visitors and a mere 2% of first-time ones said gambling was their primary purpose for visiting—fewer than said they were coming to see friends or family, or for a holiday.

Give me glamour

Certainly, holidaymakers can and do gamble—83% of visitors did—but Las Vegas offers a “gambling plus” factor that the racinos and slots parlours opening all over America cannot rival. Aside from attractions such as theatre, comedy and golf, Las Vegas is full of associations (mobsters, the Rat Pack, the World Series of Poker and so on) that no other destination can offer. it is the strangest and most fantastic city in America, glittering in the middle of the desert like a neon mirage.

Mr Adelson, the head of Las Vegas Sands and for some years the world’s third-richest person, insists that he is not in the gambling business, nor even in the gaming business (a distinction he and Michael Leven, Las Vegas Sands’s president, consider important; the difference between gaming and gambling, according to Mr Leven, “is the difference between having a cocktail and going out drinking”).

As far as Mr Adelson is concerned, he is in the integrated-resort business. His twin hotels on the Strip, the Venetian and the Palazzo, combine thousands of hotel rooms, upmarket shopping (some of it lining a Venetian streetscape, complete with a painted blue sky, canals and gondola rides), restaurants, spas, banquet halls, convention centres and, of course, a casino. the casino is necessary to drive revenue, just as the convention centres are essential to attract business travellers who may then decide to return for a holiday with their families. but around 70% of his revenue, says Mr Adelson, comes from non-gaming sources.

The model of using casinos as just one of many revenue-spinners also works for Las Vegas as a whole. in 2009 tourists on average spent around $75 a night on accommodation and stayed for 3.6 nights. they shelled out about $250 on food, just over $100 on shopping, $53 on transport and $45 on shows and sightseeing. the average gambling budget was $482 (down sharply from 2005, when the average punter bet $627). some 17% of visitors do not gamble at all. but even those who do spend more on other activities combined.

Having begun as a secluded sinning haven, tucked away in the desert, Las Vegas has had to face the fact that its chief sin on offer has become much more widely available. but for casino owners it still has a big advantage: its gambling-tax rate is capped at 6.75%. New Jersey, home to Atlantic City, offers an 8% rate, but most other places are much greedier. Sands’s only American property outside Vegas is in Bethlehem, Pennsylvania, where the state taxes gross gaming revenue at 55%.

The state of Nevada is more diversified than it was two decades ago, but it is likely to return to strength only as Las Vegas does, and Vegas’s fortunes depend on America’s economy. if people have money in their pockets, some will inevitably find its way to the Strip. but there may be no need for new hotel rooms for some time, and growth is likely to be flatter than in the past. For runaway expansion in the gambling market, look east.

<a href="http://www.economist.com/surveys/displaystory.cfm?story_id=16507768&fsrc=rsstag:news.google.com,2005:cluster=http://www.economist.com/surveys/displaystory.cfm?story_id=16507768″>A special report on gambling

Add Casino Gambling Internet Url | Info 1-gambling.info

pennsylvania gambling legislation

More on the same – posts

RECENT POSTS

CATEGORIES

ARCHIVES

Blogroll