Ahead of a looming Friday deadline, legislators in Pennsylvania are reportedly hoping to pass a measure that would reinstate a version of the eastern state’s controversial casino host fees policy so that local municipalities can continue receiving millions of dollars from gambling establishments every year.
Under legislation ratified in 2006, each of Pennsylvania’s twelve casinos was required to sacrifice 2% of their annual gross slot revenues to the townships in which they were located. The measure additionally included a provision that mandated that this amount must be at least $10 million and obliged operators to make up any difference.
However, Mount Airy Casino Resort objected in court as its 1,850 slots pulled in just $139.1 million in 2015, which meant that it was required to add $7.22 million onto its 2% host fee tax of $2.78 million, and its argument was subsequently upheld by the Pennsylvania Supreme Court. In its September ruling, the state’s highest legal authority determined that the policy violated Pennsylvania’s uniformity clause because the $10 million minimum tax burdened some casinos more than others.
According to a report from The Morning Call newspaper, legislators were then given 120 days in order to come up with a solution although this deadline passed in late-January with no agreement before the state was granted a second 120-day extension.
This second stay is now reportedly due to expire on May 26 although at least five of Pennsylvania’s casinos have committed to continuing to pay the contentious fee even if legislators have failed to come up with a solution in time.
“If it is not done by Friday, we will just make it retroactive,” Pennsylvania State Senator Lisa Boscola told The Morning Call. “The local municipalities are going to get their money. There is no doubt about that.”
The newspaper reported that casino host fees funnel around $142 million a year to municipalities across the state including $8.8 million for the city of Bethlehem, which is home to the Sands Casino Resort Bethlehem, and $3.5 million to the neighboring community of Allentown.
The Morning Call reported that two pieces of proposed legislation currently making their way through the Pennsylvania House Of Representatives hope to remedy the current impasse by changing the state’s casino host fee formula and basing the amount on each venue’s licensing fee rather than slot revenues.
“My goal as Chairman is to have this bill run as cleanly as we could without many fights,” Scott Petri, Chairman for the Pennsylvania House Of Representative’s Gaming Oversight Committee, told the newspaper. “We are looking just to keep the status quo instead of building in a cadre of other issues.”
In the Pennsylvania State Senate, legislation is reportedly due to be introduced on Wednesday that would offer smaller casinos such as Mount Airy Casino Resort funds for marketing and expansion as a way to help offset the $10 million minimum host fee.
“We’re going to look under the pillow [for funding],” Pennsylvania State Senator Mario Scavello, the Monroe County Republican behind the coming legislation, told The Morning Call. “We have a cadre of options we will be discussing.”