[toc]It seemed as though the debate on Pennsylvania online gambling expansion would start and end without Sands owner Sheldon Adelson getting too involved. After all, supposedly MGM Resorts planned to buy Sands Bethlehem for $1.3 billion. With the sale, it seemed like Pennsylvania online casinos were in Adelson’s rear-view mirror.
Now that the rumored deal is off though, Adelson is ready to fight with a fury to block gambling expansion in the Keystone State. He recently launched a $1 million ad campaign, but the main target is a little surprising. He is going after video game terminals (VGTs), not setting his sites on once again taking online gambling down.
Legalizing VGTs would lead to an influx of slot machine in PA
The concern about VGTs in the state is a divisive issue for casino operators. Some, like Rush Street and Penn National, have financial interests in VGT providers. These casinos would love to get VGTs in Pennsylvania, as it means more cash in their pockets when people purchase the machines.
Other casino operators, however, worry that VGTs would cannibalize casino profits. Adelson and Sands fall into this camp. The company is financially backing the organization called Pennsylvanians for Responsible Government, which is leading the ad campaign against VGTs.
A spokesperson for the group, Michael Bailey, spoke to the Allentown Morning Call about the company’s chief concerns:
“This proposal would destroy the brick-and-mortar casino industry and risk the nearly $1.4 billion in tax revenues that these establishments generate annually. Worse yet, because VGTs are designed to operate without employees, the 18,000 people casinos collectively employ in Pennsylvania will be put in serious jeopardy.”
Anti-VGT ad claims nursing homes could end up as casinos
The group is spending $1 million on its media campaign, which includes a commercial that showcases the kinds of places where VGTs could end up.
In previous iterations of VGT legislation, bars and truck stops are the primary targets for VGT placement. In the new ad though, the organization suggests anywhere with a liquor license could “become a casino,” including some nursing homes.
Moreover, the ad suggests this will corrupt Pennsylvania neighborhoods by putting “casinos” near schools and churches. Here is the full video to watch for yourself:
Currently there is no VGT bill on the table
It certainly is not surprising Adelson and Sands do not support VGTs. What is interesting is that they chose to make a big noise about them now.
As it stands, the current gambling expansion bill passed by the Senate and on the the House does not include VGTs. It includes online casinos, online poker, and daily fantasy sports. Many speculate VGTs will be part of the gambling expansion debate though. The current legislation does not generate enough funds to met budget expectations, so lawmakers will inevitably discuss alternative solutions.
Rather than go after online gambling, as Sands has done in the past, the company is publicly attacking VGTs. There are a couple of potential reasons for this course of action.
VGT threat killed MGM Resorts sale
For the past few months, Sands stayed pretty quiet about online gambling developments. The company also stayed quiet about a rumored casino sale to MGM. Then, the deal abruptly fell apart. One theory is something in the gambling expansion bill scared MGM off. Considering MGM is pro-online gambling, VGTs could be the issue which broke up the deal.
Lack of support for VGTs makes them an easier target
Another option is that Adelson’s group is going after the more polarizing component of gambling expansion to garner more support. VGTs are a much more contentious issue, especially among casinos. By bringing this divisive element front and center, Sands can break up the united front of 10 casinos supporting online gambling into factions.
The end result is more casinos besides Sands and Parx come out against the bill, causing nothing to get through the state legislature.
It increasingly seems like VGTs, not tax rates, might be the make or break the issue of gambling expansion this year. If that is the case, there is now someone with deep pockets willing to work very hard to ensure VGTs, and perhaps the whole bill, never come to fruition.