Yudichak responds to Luzerne County Council gambling revenue concern
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The growing popularity of online gambling is helping — not hurting — Luzerne County’s proceeds from gaming, state Sen. John Yudichak said Monday.
Yudichak said he wanted to clarify the matter because some county council members cited online gambling as a reason they are leery of guaranteeing infrastructure borrowing that is supposed to be covered by casino gaming revenue. They questioned if casino funding is secure amid a rise in online gambling.
Under state legislation approved last year, the county redevelopment authority will borrow a projected $55 million for local infrastructure projects and then pay off that debt with an annual $3 million allocation from the casino gambling-funded Local Share Account, or LSA.
Because the redevelopment authority has no ability to independently generate revenue, it is asking the county to guarantee the borrowing repayments in the unexpected event casino funding falls short.
Yudichak said the county’s LSA is “robust and stable” and predicted it will rise as online gaming grows.
“Increased online gaming revenue is a big boost to the Luzerne County LSA and further minimizes any risk to county taxpayers,” Yudichak, I-Swoyersville, said in reference to the county guarantee.
In Pennsylvania, online gaming operators must be affiliated with and receive a certificate from a brick-and-mortar casino, Yudichak said.
Pennsylvania and other states use technology to ensure residents within their borders can only play online gaming that is sanctioned and regulated by their state, he said.
The Mohegan Sun Pocono casino in Plains Township entered into an agreement with the Kindred Group (previously Unibet Group) in 2019 to provide online gaming, according to information he supplied.
Internet gaming generated $255,224 for the county LSA in 2020 and $268,342 in 2021, according to a distribution chart he furnished.
Overall, Mohegan Sun provided $11.24 million for the LSA in 2021, with the rest coming from gambling inside the Plains Township facility — $10.6 million from slots and approximately $325,000 from table games, the chart said.
Like counterparts in other states, Pennsylvania’s Gaming Control Board uses GPS software and computer/cell phone IP address identification to block out-of-state users from playing Pennsylvania-licensed internet gaming offerings, a state publication says.
If someone in Pennsylvania is able to access an online gambling site not affiliated with a casino in the state, that site originates offshore in another country and is considered illegal in the state, the publication says.
“Strict regulation that protects the players may not exist at offshore gambling sites, and there may not be guarantees on payment of winnings or access to money placed in your account,” the publication warns.
The only gaming revenue excluded from Luzerne County’s LSA is from sports betting and also video gaming terminals at truck stops, Yudichak said. County council had voted in 2017 to deny slot machines in truck stops.
It’s unclear if the redevelopment authority’s requested loan guarantee will proceed to a vote at a future council meeting.
Borrowing at a higher interest rate may be an option without a county guarantee, but that would reduce the amount of money available for infrastructure projects, officials have said.
Some council members also questioned why the new state legislation requires the redevelopment authority to borrow as a condition to receive the $3 million in LSA funds for infrastructure annually for 25 years.
Yudichak reiterated Monday that the up-front infusion will jumpstart large-scale infrastructure projects that have been deferred and may be matched with new federal infrastructure funding to complete more work.
While the county’s LSA has addressed many pressing community needs, some have criticized its failure to fund more big-ticket regional projects as originally intended.
“You can’t pay for large infrastructure projects one year at a time, and the cost to Luzerne County taxpayers will go up exponentially as these projects continue to be deferred,” Yudichak said.
He cited the South Valley Parkway as an example, saying it was initially projected at $27.5 million in 1998 and rose to $90 million when construction commenced in 2008. Yudichak argues inflation and rising interest rates will “put a larger burden on the backs of taxpayers” if bridge replacements and other projects are put off for years.
