Deal Me Out of iGaming, Sez NorCo DA

According to Online Poker Report, Pennsylvania is ready to deal online gambling into the mix of money-grabbing schemes to generate revenue without a tax hike. The Morning Call.reports that a majority of state Republicans support onling gambling. But not yesterday. Online gambling folded in the state House, 107-81. But the cards were shuffled and dealt again. A motion to reconsider was adopted by an even larger majority of the very legislators who had just said No.

Only in Harrisburg.

The gimmick under which this is being pitched is that the money raised will go to distressed pension funds and the law will actually regulate iGaming. People already gamble online, claim iGaming advocates. “What we are providing in this bill is consumer protection," says State Rep. Pete Dunbar.

Payne's bill would allow iGaming, but it would be restricted to those who already have gaming licenses. A casino or a racetrack would have to pay $5 million for each iGaming license, and 14% of the gross would go to the state. Casinos with a license could install slots and online gambling at airport terminals and off-track betting parlors.

The only casino owner who opposes a gambling expansion is the Sands Casino's Sheldon Adelson. He's formed a group called Coalition to Stop Internet Gambling, His group accuses State Rep. Payne of putting Pennsylvania's kids at risk by supporting online gambling predators who target children and hook them with Disney-looking cartoon characters.

What do you think? Morganelli argues this makes it too easy for people who are predisposed.



Northampton County DA John Morganelli's remarks: In June of 2015, our State Senator Lisa Boscola warned that the idea of expanding gambling in Pennsylvania including, on-line gaming, was gaining traction due to structural deficits in the Pennsylvania budget. Senator Boscola was absolutely right when she raised a red flag pointing out some of the dangers that come with the expansion of gaming.

On November 19, 2015, the media reported that a state house committee had voted out of committee legislation that would represent the biggest expansion of legal gambling in Pennsylvania since the casino era was ushered in. By an 18 to 8 vote, the Gaming Oversight Committee approved a bill that, if enacted, would:

• Legalize and regulate Internet gambling run exclusively through the state’s 12 licensed casinos;
• Create a new type of mini casino in Pennsylvania by permitting up to 250 slot machines at off track betting parlors run by the state’s six racetracks;
• Allow casino operators that reached agreement with airport authorities to install slots at the state’s six airports designated as capable of handling regular international flights, including Harrisburg.
• Allow casinos to sell alcohol around the clock.

The aforesaid vote pushed forward the debate that could very well lead to Pennsylvania joining the ranks of states that have legally sanctioned gambling on all forms of personal electronic devices including computers, tablets and smart phones.

The arrival of casinos in Pennsylvania sparked controversy throughout the state with proponents arguing that gaming, and specifically casinos, would increase revenue and employment in the state. Now, however, Pennsylvania leaders are no longer satisfied that the current industry is sufficient. Pennsylvania is now looking to legalize on-line gambling, a practise that, in my opinion, could harm our society instead of helping it. Although I recognize that on-line gambling and the expansion of gaming in general can be used as a means to raise state revenue, I am very concerned about the negative impact of such an expansion. Seven states currently have legal on-line gambling: Nevada, Delaware, New Jersey, New York, Georgia, Minnesota and Michigan. New Jersey, which legalized remote gaming in 2013 after being vetoed by Governor Chris Christie in both 2011 and 2012, has actually seen revenue fall dramatically short of its previous projection. However, the real concern is the social impact that this would have — namely the increase in addictions and crime.

There are many types of gambling addictions, but the most common and all-encompassing is a problematic addiction. It is defined as an addiction that causes “disruptions in any major area of life: psychological, physical, social or vocational.” In January of 2007, Professor Mark Griffith wrote an article published by the British Medical Association titled “Gambling Addiction and a Treatment Within NHS.” Griffith goes on in depth to discuss the dangers of on-line gaming specifically, saying that it is potentially “one of the biggest challenges concerning the social impact of gambling.” According to Professor Griffith, 10% of the UK population has an on-line gambling addiction, while 3-5% of city residents are addicted. It is the remote nature of this type of gaming that makes it such a threat to public health. The accessibility it offers allows people to gamble wherever and whenever, including at work and school. For addicts, the temptation is sitting right there, in their phone, their computer, at their desk. With this accessibility comes a lack of monitoring, where the vulnerable, such as children, problem gamblers, addictive types and the mentally impaired can use the site without any supervision. The demo modes of these casinos, where users can have a free trial to experiment with the site, are typically made to let the user win, in order to lure them into actual gambling. Once they are betting users, the game automatically is flipped to have the house in its favor. This availability, although not proven to be any more addictive then in-house gambling, allows people to engage in this behavior and therefore promotes it to a broader user base than normal. At the present time, and with brick and mortar casinos, individuals have to at least get up out of their chair, navigate their way to a casino and then navigate back home. The privacy and seclusion that on-line gaming offers is dangerous, as people can sit in the comfort of their homes and gamble for hours on end. In a traditional casino, dealers and staff are there to oversee the amount of time spent at tables and to discourage problematic conduct. Not so with on-line gaming.

Another issue with on-line gaming is the lack of fiscal awareness. Gaming sites deal exclusively with electronic cash which “may serve to distance a gambler from how much money he or she is spending.” (Griffith) Furthermore, the advent of e-cash systems allows gamblers to access money with a click of a button, never having to leave the game and leading to the idea that virtual cash is less valuable then actual cash.

Further, gambling drives people to become involved in unhealthy behavior, not just at the tables, but in society as well. Take a case directly out of Northampton County of Commonwealth v. Greg Hogan. The president of his class at Lehigh University, Hogan was sucked into the world of on-line gambling. His father found out, and installed protective software on his computer. However, some off shore gambling sites worked their way around the software, luring Hogan back and causing him to fall into thousands of dollars’ worth of debt. He felt so desperate that he turned to crime on December 9, 2005, Hogan robbed a bank. His on-line poker addiction drove him to become someone else, someone that not even his closest friends or family recognized. Gambling turned him into a criminal. The same thing happened to a nun working at Iona College in New York. She embezzled over $850,000.00 dollars from her school to fund her gambling addiction.

But the danger does not stop there. A study funded by the American Gambling Association titled “Suicide in Gambling: An Analysis of Suicide Rates in US Counties and Metropolitan Areas” showed that the suicide rates in major gambling areas are higher than those of towns that do not allow gambling. “Gambling or some factor closely associated with gambling is linked to elevated suicide levels. The findings raised the possibility that the recent expansion of legalized gambling and the consequent increase in gambling may be accompanied by an increase in US suicides (Phillips et al., 1997, 378)”

Bankruptcy is also an issue at play. People gamble away their salaries, their savings, their lives. In Mississippi, a study found that gaming was responsible for a 24% increase in bankruptcy filings, not just in the state itself, but in neighboring states as well. The people who cannot fight their addiction lose everything resulting in an increase likelihood of hunger, homelessness, and the inability to provide themselves with necessary care. Obviously the on-line gambling has not been the sole contributor; the brick and mortar casinos themselves take part of the blame. But by introducing the second method of gambling, we are letting lose a second lion in the pasture.

Additionally, there are many crimes that are exclusive to on-line gambling. There are fake gaming sites, lottery scams, and even “winner” scams. Criminals have begun to use the Internet as a way to broaden their base of victims, as it allows them to send out mass messages in a short amount of time, maximizing their efforts. A fraud scheme from Canada stole $5 million dollars from US citizens sending out emails telling them that they won the lottery. And with the constant improvement in hacking techniques, it has become alarmingly easy for people to steal credit card numbers and personal identities. Additionally, the backroom Internet betting parlors make it much more difficult for prosecutors to find the participants, and for the government to regulate the gaming. These parlors use the anonymity and dark corners of the Internet to hide from the law, enabling far more illegal activities than a traditional casino. It is this secrecy and privacy that makes on-line gambling the perfect place for money laundering. Former Attorney General Eric Holder said the following:

“The Internet gambling operations are, in essence, the functional equivalent of wholly unregulated offshore banks with the bettor account serving as bank accounts for account holders who are, in the virtual world, virtually anonymous. For these reasons, Internet gambling operations are vulnerable to be used not only for money laundering but also for criminal activities ranging from terrorists financing to tax evasion.”

Essentially, there is no way to track the money that is being traded on-line, due to fact that virtual cash leaves no paper trail; it is nearly impossible to find where and when the money is turned over into real liquid. This sort of gambling is perfect for laundering, as high volumes of money are being transferred constantly. Many criminals have begun to use on-line casinos as methods of payment for illegal activities, disguising payments as winnings.

It is my hope that Pennsylvania legislative leaders scrap any idea of the expansion of gambling in Pennsylvania. In my view it will clearly lead to an increase in crime, poverty among those who can least afford it, addictions and social instability. This message is not one that should be interpreted as anti-gambling or anti-casino. I supported the construction of the Sands Casino in Northampton County and I have personally patronized it. This is not about brick and mortar casinos but clearly about the expansion of on-line gambling and the other aspects of this legislation that, in my opinion, can only result in a negative impact upon many of our citizens throughout the state.

For the aforesaid reasons, I will ask the Executive Branch of the Pennsylvania District Attorney’s Association to take a formal position against this proposed legislation.