Following last week’s ruling from the Pennsylvania Supreme Court that struck down the controversial “local host fee”, officials in the city of Pittsburgh have announced that they intend to ask Rivers Casino to voluntarily pay an annual duty of $10 million.
According to a report from the Pittsburgh Tribune-Review newspaper, the eastern state’s highest court found that the “local share assessment” usually levied on casinos is unconstitutional because it treats Pennsylvania’s twelve casinos unequally and gave lawmakers four months to amend the procedure.
Under the terms of 2004’s Pennsylvania Race Horse Development And Gaming Act, casinos in Pennsylvania are required to hand over at least 4% of their annual gross slot machine gambling revenues to host communities. This includes 2% to the county in which the facility is located as well as an equal percentage or $10 million, whichever is greater, to the host city or town.
In light of the ruling, Wednesday saw Paul Leger, Finance Director for Pittsburgh, tell the Intergovernmental Cooperation Authority, which is one of the city’s state-appointed financial overseers, of his plan and state that he is confident that Rivers Casino will comply.
“[Rivers Casino] expected to pay this when [it] opened the casino,” said Leger. “There has been no resistance from the casino. Our discussions have been very cordial.”
In response, the Intergovernmental Cooperation Authority approved Pittsburgh’s proposed $539 million annual operating budget contingent upon the city verifying within 120 days that it will receive the $10 million from Rivers Casino.
“Discussions are under way, and options are being considered,” read an e-mail statement from Jack Horner, spokesperson for Rivers Casino.
After rejecting city budgets in 2014 and 2015 and withholding about $20 million in gambling tax revenues, the Pittsburgh Tribune-Review reported that relations between the administration of Pittsburgh mayor Bill Peduto and the Intergovernmental Cooperation Authority have recently improved.
“We didn’t want to disapprove [the budget] because we are very confident in the numbers now,” said Reynolds Clark, Interim Executive Director for the Intergovernmental Cooperation Authority. “The Intergovernmental Cooperation Authority is not sitting on any gaming revenues.”
The newspaper reported that the Intergovernmental Cooperation Authority transferred about $1.3 million in gambling tax revenues to Pittsburgh for 2016, requiring that the funds be used for capital improvements to city buildings and grounds. Clark explained that the authority has a $300,000 operating deficit for the current fiscal year mainly due to legal fees stemming from a lawsuit Pittsburgh filed in an attempt to obtain gambling tax revenues.
“There is a gap in the budget, and we are working with the city and state to close that gap,” ICA Chairwoman said BJ Leber, Chairperson for the Intergovernmental Cooperation Authority.