Pennsylvania casino owners leery of table games tax plan
By Mike Wereschagin
Published: Wednesday, Oct. 7, 2009
Casino operators in Pennsylvania pay some of the highest tax rates on their revenues in the nation, a fact many of them point out to state legislators as the General Assembly considers bills to legalize — and tax — table games.
While Pennsylvania's 55-percent gross tax rate is in line with most states' racetrack-casino taxes, it is the highest rate in the country for stand-alone casinos. The state Legislature is considering proposals to legalize table games with tax rates from 12 percent to 34 percent, which is closer to the range of tax rates for stand-alone casinos in other states.
Lawmakers also are considering one-time, table games license fees of up to $20 million.
"State officials are kind of trying to balance a desire not to totally open up the state to gambling, but at the same time to have it be profitable for (casino) owners," said Ian Pulsipher, a gambling policy specialist at the National Conference of State Legislatures in Denver. As budget crises spread across the country, more states have tried to expand gambling, he said.
Pennsylvania has been without a budget since July as lawmakers battle over how to fill a gap initially estimated at $3.2 billion. They are looking at revenue from the tax on table games to help pay the bills.
"State finances are really what drive gambling expansion," Pulsipher said. "Where we are now is that states are still in a really tough financial spot. They've already been making cuts to everything they can cut. Gambling is one of the few revenue opportunities out there that doesn't involve raising taxes."
At least one Pennsylvania casino said it will not add table games if the tax rate is too high. Owners of the Meadows Racetrack & Casino in North Strabane are backing a bill that taxes table games at 12 percent and charges a $10 million license fee.
"We want people to understand, if the tax rate and the fees are too high on table games, it simply won't work for us," said casino spokesman David La Torre. With the millions of dollars in regulatory fees paid to the Pennsylvania Gaming Control Board, the casino pays close to 60 percent of its gross revenue to the state, he said.
"We're not going to do table games if it doesn't make sense," he said.
The lowest tax rate on stand-alone casinos is Nevada's 8 percent, according to data from the American Gaming Association. The highest, behind Pennsylvania's, is Illinois, where the graduated tax rate can surpass 50 percent, but averages 36.1 percent.
Racetrack casino tax rates range from a low of 23.2 percent in Iowa to Rhode Island's 72.7 percent tax rate.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Proposed federal ABLE Act would help disabled save
- Visiting Corbett stumps for education budget
- Hospitals conserve IV solutions amid national shortage