The Pennsylvania Gaming Control Board (PGCB) is rapidly running out of funding. Following the conclusion of its task to licence the new slots operations in the state, the PGCB must now oversee and regulate gambling in Pennsylvania. Casino operators have reacted adversely to a proposed 5% tax on slots revenue to finance the Board permanently, calling it ‘onerous’. Pennsylvania already levies a high 52% tax on revenue.

In a letter sent to the new casino owners yesterday, three proposals were outlined to cover the future costs of the PGCB, police, attorney general’s office and Department of Revenue. The first would tax each operation the same initially, regardless of revenue, and then reduce the charge to between 1.5% and 1.8% once all the slots parlours are open. The second proposes a 2.9% tax on slots revenue and a loan arrangement to cover shortfalls until more operations open. The final suggestion is to take 4.3% of slots revenue to start and then reduce it to1.5% to 1.8% when all venues are open.

The PGCB has sufficient money to cover its payroll until the end of January and in December it sent a letter to Philadelphia Park, Mohegan Sun at Pocono Downs and Harrah’s Chester, informing them of the 5% tax. Complaints were made to legislators and the Department of Revenue and the protests have resulted in the proposed tax being dropped and further discussion instigated.

Somehow the PGCB, legislators and casino owners much reach a workable compromise. By law the PGCB is allowed to charge for casino regulation but there are no guidelines for how this should be done. An additional 5% tax on gaming revenue would make Pennsylvania charges much higher than in most other states. There is also the heavy cost to those operations opening first, compared with ones that open many months later. Casino owners and some legislators are calling for a fair solution to be found.
(E-01.12.07)

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