Online gambling won’t cure Pa. budget blues

The state Legislature and Gov. Wolf must do more to fix the state’s persistent budget deficits.

Pennsylvania lawmakers and Gov. Tom Wolf have a $3 billion riddle to solve.

That’s the structural budget deficit that comes back to haunt the state when the previous year’s revenue projections fail to keep up with spending. It’s happening again. Last year the GOP-controlled Legislature and the Democratic governor managed to pass an “on-time” budget that still required a post-deadline search for new revenue. Remember? The cigarette tax jumped by $1 a pack. Taxes on smokeless tobacco and e-cigarettes went up, too.

Digital downloads are now subject to the sales tax.

Lottery players now have to pay state income tax on winnings.

A plan was hatched to allow slot machines in airports and racetracks.

Along the way, beer-selling laws were liberalized; supermarkets, convenience stores and restaurants were allowed buy licenses to sell wine.

And yet, many valuable budget ideas were left on the table:

— Pension reform, the most worrisome future cost-driver.

—Ataxon natural gas drilling.

— Selling off the state-controlled liquor system.

It’s unlikely any of those changes will find their way into the 2017-18 state budget, so legislators are warming up to the one big cash cow still out there — online gambling, which would be operated by the state’s casinos.

Other ideas under consideration are interactive lottery games online, and bringing sports fantasy leagues under the aegis of the casinos.

Allowing people to play table games and slots on their cellphones and PCs may seem like a natural extension of legalized betting, but it’s no way to balance a budget.

It’s likely to feed gambling addiction, force more people into financial straits and contribute to gambling-related crime, as Northampton County District Attorney John Morganelli has argued.

Clearly, Pennsylvania is looking to follow New Jersey’s lead in legalizing online gambling.

Many poker websites are hoping the two states would join together, possibly with Delaware, to create a regional “supermarket” for online betting.

A recent study commissioned by two gambling industry groups, Play Pennsylvania and Online Poker Report, predicts that legalized online gambling could bring Pennsylvania $126 million in licensing fees immediately, and then $426 million in revenue over five years, based on a 20 percent tax rate.

While New Jersey’s experience with online gambling was paltry in the first year, revenues have grown from $122 million in 2014 to almost $200 million last year, according to the report.

Not all casino owners in Pennsylvania are on board. Sheldon Adelson, owner of the Sands Casino Resort Bethlehem, is leading the opposition.

Before Pennsylvania legislators opt for another gambling expansion — many see it as a “risk-free” political move compared to raising taxes, privatizing liquor or tackling pensions — they should take a closer look at whom they’re putting at risk.

It’s not just problem gamblers, it’s all taxpayers.

Their government is being increasingly funded by “sin taxes” that promise a quick payday — sure to be followed by the flattening of the gambling market as other states join in, and the social costs of encouraging people to make bad choices.

Before Pennsylvania legislators opt for another gambling expansion, they should take a closer look at whom they’re putting at risk. It’s not just problem gamblers, it’s all taxpayers.