Mount Airy Casino Challenging Yearly Host Tax

by Jim Hall

Mount Airy Casino ResortOne casino located in the state of Pennsylvania is tired of paying $10 million in taxes to the host town. The Mount Airy Casino Resort is fighting in court to see this tax amount changed.

Visitors to the state of Pennsylvania have much to see and do, including a wealth of casino gaming options. There are several casinos located in the state that offer quality casino and poker gaming, including Mount Airy Casino Resort. For years, the casino has provided gaming in the Mount Airy region of the state, paying taxes and adhering to regulations. For ten years now, the casino, along with others in the state, have paid $10 million each year as an annual host tax. The casino is now tired of paying up and has went to court to try and see this amount changed.

The Bill That Started It All

The reason the casinos pay such a high host tax dates back to 2006. Senate Bill 862 was passed and signed into law that year and required casinos to pay 2% of their gross slots revenue to the township where the venue is located. The 2% must be equal to at least $10 million or the casino will have to make up the difference.

In 2015, none of the twelve casinos in the state were able to bring in $500 million in slot gaming revenues so each facility had to come up with the extra cash. The Sands Bethlehem, a venue run by Sheldon Adelson, is the largest venue in the state. For the fiscal year, the venue only generated $288.9 million in gross revenues for slot gaming. At 2% of this amount, the tax payment would be $5.7 million. This is of course far short of the $10 million requirement so the casino will come up with $4.3 million to meet that mark.

The Mount Air Casino has seen an even bigger difference in the amount they have to pay. For the year, the casino was able to earn $139.1 million in slot income. 2% is just $2.78 million so the casino had to forfeit $7.22 million in additional taxes. The casino wants to see uniformity and fairness and believe the $10 million rate is not either one.

Heading to Court

The casino has now decided to take the matter to the Supreme Court of the state to see if the tax variance structure is legal based on current state law. A petition was first filed by the venue last year in April. The casino is not alone in their plight. Rivers Casino of Pittsburg has also joined in on the fight, suing the Department of Revenue of the state earlier this year on charges that were similar to those filed by Mount Airy.

One would imagine that if the Supreme Court of the state decided to rule the amount to be in violation of the taxation laws of the state, the venues would just pay the 2%. While this would be good for the casinos, the amount would be far less for the cities and towns that have come to rely on the higher amount.

You Already Knew

Many are calling out the Mount Airy Casino stating the operators knew what they were getting in to when the venue was first opened in 2007. The law was enacted in 2006 so already existed before the casino was constructed. State officials believe it is a little too late to now be arguing over a state law that has been on the books for ten years.

It is interesting to consider what the tax could do to the potential for online gambling in the state. With such a high rate of tax due, not to mention other taxes, casinos might not be able to afford to offer online casino gambling if legislation were to be put in place.