Budget Highlights
A newly unveiled measure to expand casino-style gambling in Pennsylvania — already the nation’s No. 2 commercial casino state — is on the move in the Legislature in a bid to help the state government plug its biggest cash shortfall since the recession.
The heavily lobbied legislation emerged from behind closed doors Wednesday night as part of wider budget negotiations, after competing measures passed the House and Senate in the last five months. It involves a jumble of concepts that offer a combination of license fees and taxes on new gambling losses. The Senate passed it, 31-19. The measure requires approval by the House and Democratic Gov. Tom Wolf. Here is a look at some of the elements:
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SATELLITE CASINOS
Each of Pennsylvania’s 10 larger casinos would be able to bid on a satellite casino license allowing up to 750 slot machines and 30 table games at a facility that is not within 25 miles of another casino. Bidding starts at $7.5 million, with a table games certificate costing an extra $2.5 million. License fees and taxes on gambling at the sites would go into the treasuries of local and state governments, as well public schools and economic and civic development projects.
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GAMBLING AT TRUCK STOPS
Qualifying truck stops could operate up to five slot machine-style video gambling terminals. The revenue would be split between the state, the license holder, terminal operators and host counties and municipalities.
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ONLINE GAMBLING
Licensed commercial casinos, both in Pennsylvania and beyond, can apply to the Pennsylvania Gaming Control Board to operate casino-style gambling on websites and mobile applications to people in Pennsylvania. A license fee of up to $10 million would be necessary to operate a website. Gross revenue from gambling on online slot machine-style games would be taxed at a 52 percent rate, while online table game revenue would be taxed at 14 percent. Just three states — New Jersey, Delaware and Nevada — allow online casino gambling.
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LOTTERY
The Pennsylvania Lottery would be able to offer keno and feature online games, including its existing games, instant tickets and raffle games. The proceeds would go into the state Lottery Fund, which subsidizes programs for the elderly. The lottery would be prohibited from operating casino-style games online, such as poker, roulette, slot machines and blackjack. Four states — Georgia, Illinois, Kentucky and Michigan — allow online lottery play, according to the National Conference of State Legislatures.
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LOCAL SHARE
Casinos would be required to pay millions of dollars annually to their host communities, reinstating a mandate struck down by the state Supreme Court last year because it treated casinos differently. The requirement had meant about $140 million that Pennsylvania’s casinos pay annually to local government budgets, institutions and projects in Philadelphia and 11 counties.
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AIRPORT GAMBLING
Casinos could seek approval to operate an interactive gambling parlor at an international or regional airport in Pennsylvania, with an agreement from the airport authority. The machines would be accessible only to ticketed passengers and license fees would be required. Eligible airports are: Philadelphia; Pittsburgh; Erie; Wilkes-Barre/Scranton; Lehigh Valley; Harrisburg; Arnold Palmer Regional Airport; and University Park Airport in State College. Taxes on airport gambling revenue would go to the state and local governments.
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FANTASY SPORTS
Daily fantasy sports betting in Pennsylvania would become regulated and taxed in Pennsylvania. Fantasy sports operators would have to pay a $50,000 license fee and a 15 percent tax based on in-state participation. Applicants would have to verify that players are at least 18.
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SPORTS BETTING
Casinos could apply to the Pennsylvania Gaming Control Board to offer sports betting at the casino or online, should it become legal under federal law or under a federal court ruling. A license would be $10 million.
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RESORT CASINOS
Resort casinos — Valley Forge Casino in suburban Philadelphia and Lady Luck Casino Nemacolin in southwestern Pennsylvania — can pay a $1 million fee to be relieved from requirements in the original 2004 casino law that gamblers must also take part in other amenities at the establishment.
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CASINO OWNERSHIP
A 2004 provision limiting ownership of casinos to no more than one controlling stake in one casino would be repealed.
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Source: Pennsylvania Senate Republicans.
HARRISBURG >> The Pennsylvania House returned to session Thursday to continue debating a just-unveiled plan to expand casino-style gambling to truck stops, online portals, airports and 10 new mini-casino sites.
The debate comes as lawmakers hope to squeeze another $200 million a year or more from casino license fees and taxes on gambling losses to help stitch together Pennsylvania’s deficit-riddled finances and end a four-month stalemate over how to scrape up the cash.
New gambling cash would also flow to decade-old property tax rebates and local government treasuries, institutions and development projects.
Pennsylvania is already the nation’s No. 2 commercial casino state, netting $1.4 billion in taxes from the industry in the most recent fiscal year. It would make Pennsylvania the first state to allow both casino and lottery games online, in a quest for money from new and younger players. It also would pave the way for the struggling Pennsylvania Lottery — which funds programs for the elderly — to begin offering keno.
The 470-page bill became public Wednesday evening and quickly won Senate approval. The House’s GOP majority leaders support the bill, although Democratic Gov. Tom Wolf isn’t saying whether he backs it.
Opponents warn that it will cause an “explosion” of gambling. It also drew complaints from lawmakers that they had had little opportunity to read the complicated bill and that it is packed with pet provisions for certain casinos or lawmakers.
For instance, one provision that would repeal a long-standing limit on casino ownership in Pennsylvania could moot a lawsuit that has held up construction of a new Philadelphia casino for nearly three years.
Another provision would protect much of northeastern Pennsylvania around Mount Airy Casino Resort — founded by billionaire Louis DeNaples — from the construction of a mini-casino that could potentially compete for gamblers. Delaware County would get greater control over a portion of the taxes from Harrah’s Philadelphia Casino that goes toward area development projects.
Yet another provision would effectively direct an extra pot of cash to counties with lower performing casinos this year.
The provision allowing truck stops to operate up to five slot-machine-style machines, called video gaming terminals, caught the attention of House Gaming Oversight Committee Chairman Scott Petri, R-Bucks. He said the bill carried a raft of unintended consequences, including a definition of truck stops that is “so broad, anything you think of as a convenience store is a truck stop.”
“You literally could drive a truck through the definition and its ability to be misused,” he said.
Pennsylvania-headquartered Penn National said it will consider suing over the gambling package, if it becomes law, because of the “uniquely punitive impact” on the Hollywood Casino it owns in suburban Harrisburg.
That prompted Rep. Mark Rozzi, D-Berks, to question why Mount Airy Casino would get special protection from the competition of a new mini-casino, but Hollywood Casino would not.
The bill would allow each of Pennsylvania’s 10 larger casinos to bid on a mini-casino license allowing up to 750 slot machines and 30 table games. Bidding would start at $7.5 million, with a table games certificate costing an extra $2.5 million.
