Casino Taxes to Continue Coming In to Delaware County

by Jim Hall

The Pennsylvania casino tax situation has many cities and municipalities wondering how they will meet their budgets, with one casino and location now coming to an agreement for continued cash flow.

Back in September, the State Supreme Court of Pennsylvania ruled in favor of Mount Airy LLC versus the Pennsylvania Department of Revenue that a section of the Gaming Act from 2004 was unconstitutional. The issue at hand was a 2% tax on gross terminal revenues or $10 million in payments, whichever was higher to be paid to the local municipality. This rule negatively affected smaller casinos and the court agreed. The local share assessment has been in jeopardy for some time as legislators have been unable to create legislation that will enforce a change in this tax. Now it seems gaming venues and the host cities are trying to come up with solutions. Harrah’s Casino along with Chester City and Delaware County have reportedly been able to come to a deal on the matter.

Delaware County/Chester City

The areas of Delaware County and Chester City benefit from a local share assessment from Harrah’s Casino, of over $14 million each year. Delaware County receives around $4.3 million while Chester City earns around $10 million from the gaming venue. Earlier this week, it was announced by the Delaware County Council that the group had unanimously approved a memorandum of understanding between the county, the city and the owner of the Harrah’s venue, Chester Downs and Marina LLC.

John McBlainJohn McBlain, a County Councilman, explained what happened by stating that the agreement will allow Harrah’s to continue to pay the tax on slot gaming that the court ruled as unconstitutional. McBlain commended several officials including Senator Tom Killion and Tom McGarrigle along with Representatives William Adolph and Nick Miccarelli for working with Harrah’s in order to seal the deal.

Legislators began reaching out to Harrah’s as soon as the State Supreme Court made their ruling, in the hopes of dealing with the situation locally. An agreement was in the works and all parties have now been able to make the decision to work together. The money will keep flowing and the city and county will not be affected by the ruling.

Significant Agreement

The agreement between the county, city and casino is quite significant. If there was no agreement in place, Chester City as well as Delaware County would have been left with a huge hole in funding as well as budget shortfalls. Local taxpayers would have had to make up this amount. Tom McGarrigle pointed out that having tax payers come up with the money was unacceptable and he was appreciative of the Harrah’s casino officials for realizing this and helping to provide a solution.

A deadline has been issued by the State Supreme Court of January 27th to see a change made to the Gaming Act. However, it is not likely that legislators will be able to create a solution before this time frame.

McBlain stated that they are hopeful that the issue will be resolved in the last session or with the beginning of the next session. However, it is possible that no solution will be made by the deadline and other issues involving the Gaming Act will stretch farther.

Legislators have had a hard time with the tax issue as there are other components that some wish to consider such as online gambling and daily fantasy sports, among other gambling expansions. Operators as well as municipalities of the state will have to wait and see what legislators are able to come up with in regards to legislation for the share assessment tax. It may be that changes will take some time and additional gambling options may be included.