A Q&A with Senate Majority Leader Joe Pittman

As Pennsylvania political leaders consider whether to tax and regulate skill-based gaming machines that currently fall outside of the state’s gaming laws, Senate Majority Leader Joe Pittman will be key to shepherding such a bill through the legislative process. 

As part of City & State’s Special Report on Gaming, Pittman recently spoke with City & State about the state of the skill game debate in Pennsylvania, public safety concerns he has surrounding the current unregulated nature of the games, and how he would prefer to use a new revenue stream created through a tax on games of skill.

This conversation has been edited and condensed for length and clarity.

How likely is it that a bill to tax and regulate skill games in PA will get done this year?

I do think it's a very complex issue. It's going to be very hard to thread a needle recognizing that there are a lot of small and independent businesses that are now using games of skill in their establishments. We're also dealing with these … what I will call mini-casino parlors, which I think are the greatest concern of all. Figuring out how to bring that under a proper regulatory framework and a reasonable framework of taxation, certainly given where the Commonwealth Court ruling came down, and also now all these impending cases before the Supreme Court  – there's a lot of moving parts here. I think there are a lot of complexities to it, but it does seem that there is at least a common interest across partisan boundaries that these games should have some degree of regulation and taxation around them.

You mentioned the mini-casinos – what are your concerns about the games from a safety standpoint?

I certainly think we've already seen some anecdotal evidence where some of these mini-parlors, in particular, have been hijacked or robbed. It doesn't seem like they have very stringent oversight or very regulated facilities. I think that that certainly leads to concerns of public safety. I think that that is one of the reasons why gaming in general, or any kind of gambling-type concept – whether you say there's an element of skill to it or not – has a degree of regulation around them. Obviously, there are age restrictions, things of that nature, that should be brought under consideration. I think a lot of times in these parlors you're seeing that it's essentially a free-for-all. That, for me, is what the primary concern is.

Some of the bills that have been circulated would essentially require that these games be a supplemental source of income for an establishment. Do you think some sort of language like that would help prevent this mini-casino issue?

I think anything that would make it clear that it has to be tethered towards something that is already licensed – there's a lot of talk about it having to be tethered to liquor establishments. There's thought that perhaps the lotto-licensing structure is a way to look at this. I think there's a belief that the Gaming Control Board needs to be engaged in the regulation of them somehow. Anything that makes it clear that this needs to be viewed as something that supplements a business that is properly regulated and functioning is the premise that I think many are driving toward.

Do you have any concerns about the addictive behaviors that can surround gaming and forms of gambling as this conversation takes shape?

I think the toothpaste is so far out of the tube when it comes to gaming in general that those types of issues are present no matter what the status of these specific skill game machines are. Obviously now with the advent of technology, the ability to engage in gambling from your smartphone is ubiquitous, and so I think we've greatly passed the rubicon of the addictive traits of gambling based on the structures that we have already established.

Shifting gears a bit to some of the legal questions surrounding this issue. The PA Supreme Court is taking up an appeal on the skill games issue. Do you think the court's consideration of this could have any impact on the timeline in which the legislature takes up skill game legislation?

I don't think we should be influenced by any potential schedule of the courts. The reality is this is extraordinarily complex. We need to be thoughtful about trying to get this right, and whatever timeframe that takes, whatever that looks like, to me the most important thing is that if we're going to step into a regulatory-taxation framework on this issue, we have to do it the right way. We have to do it (in a way) that it equates to the very simple mathematical problem that we have in Harrisburg, which is 26, plus 102, plus one.

Does that deficit issue underscore a need for action on this, or anything else, that could provide the state with a new stream of revenue?

It does seem to me that it is an area where there's at least some consensus that it could be a stream of revenue. Obviously, the governor made this announcement in his budget address. As you point out, there are several pieces of legislation that have been introduced, and all of it would, to a degree, generate revenue. We have pressures on our General Fund. We have pressures as it relates to some who think that we need to spend more on public transit, some that view the need for transportation infrastructure. So there's a plethora of interests in potential revenue streams. I think we do need to figure out a way to identify revenue streams. It seems that of all of the conversations that have occurred about that, this is one area where there is the most mutual interest. 

If this taxing and regulatory structure was enacted, do you have any preferences on how this revenue would be used, or should be used?

I do think we have to have some sensitivity to the General Fund. We do have a structural deficit. The budget that we passed here in June was a compromise. If it were a budget that I would be crafting on my own, it would have spent less. But obviously, we had to reconcile in a divided government. So that's certainly an area of need. I have made it clear that if we're having a transit discussion, that discussion cannot occur without infrastructure, as well. We have never addressed transit or infrastructure without dealing with both of them and so I don't see a pathway to deal with just transit. If we're going to deal with both issues, I don't see where we find revenue through existing streams to meet those interests. So I have suggested that the only potential revenue stream that I see out there of any magnitude is games of skill – and if a portion of that could be used for transit and infrastructure, I think it's at least worth considering.

When you say infrastructure, what types of things are you thinking there?

Our road and bridge network. I mean, it's no secret that Pennsylvania has more highway miles than New York and the New England states combined. We have a massive transportation infrastructure network. We're obviously challenged by a freeze-thaw cycle that really beats up roads over a period of time. We need a lot of bridges because of our obvious stream network, and our hills and our valleys. Those are very expensive to manage and maintain. That inflationary issue, obviously, of making projects more expensive is limiting our ability to keep up with our current infrastructure.

Is there anything you would want the public to know about skill games in PA, as talks about this issue continue?

I just think that the public needs to understand that this is a very nuanced issue. These are issues where there's a lot of push and pull. This is a diverse commonwealth, so when we deal with issues like this on the statewide level, they tend to have different impacts on areas. Those are the dynamics we're going to have to try to navigate, whether we can do it in the fall session or not I think is going to largely depend on the governor's willingness to step forward and lead on the issue and figure out a way to reconcile differences that we may have between the House and Senate.