No Senate Vote Means PA Municipalities go without Casino Payments

by Jim Hall

Robert DonchezPennsylvania State House bill to die without Senate vote which will lead to continual issue with casino host fee payments.

The state of Pennsylvania has been struggling for the past few months, having to come up with ways to pass a budget as well as discussing a potential online gambling industry. Just recently, an issue came to light involving casino host fee payments in the state, with the State Supreme Court ruling that the payment law is unconstitutional and that changes must be made. The State House was able to pass a bill that combines online gambling and the host fee payments for casinos but this bill is set to die if a Senate vote does not take place within the next two weeks.

Senate Has another Plan

Members of the Senate have stated that the municipalities that are currently relying on the $142 million paid in annual host fee payments to balance budgets should not panic as another plan is in place to keep the money coming in. According to the decision by the Supreme Court, the host fee will be cut off by the 26th of January. However, certain towns are not set to receive the next check from casinos until April. Legislators say the 15th of April is a deadline that they will be able to beat.

Chairman of the Senate Appropriations Committee, Senator Pat Browne, stated that:

Pat Browne Statement

Robert Donchez is the Mayor of Bethlehem has welcomed the advice and that if the senators feel that the problem will be resolved the he believes them. The city of Bethlehem will earn $8.8 million from the local casinos which provides 12% of the city’s budget. The funds are then used to pave roads, for police protection and more. Donchez plans on preparing the budget with the casino money considered and will have a backup plan in case it is needed. The mayor’s backup plan would see the city use a line of credit or a loan to be able to come up with the extra funds if the Senate is unable to sign a change in the law.

Casino Host Fee Payment Problems

The issues behind the municipal budget stems from the state Supreme Court deciding two months ago that the fee by the host was in violation of the uniformity clause of the state constitution. The law was legalized back in 2004 and required gaming venues to pay a host fee set at 2% of slot gaming revenues or pay $10 million, with the highest amount of these two to be paid.

Last year, a case was filed by the Mount Airy Casino that argued that minimum fee for hosts of $10 million was a larger section of revenue totals for the smaller casinos such as their own. Especially when compared to the larger gaming venues such as the Sands, which is located in Bethlehem. The Supreme Court made their decision in favor of Mount Airy but realized that local communities would be impacted. This is why the 120 day stay would be put in place, giving legislators until the 26th of January to make the needed changes.

Last week, both the House and Senate left without making a deal. During the final days of the Senate session, an amendment was passed that would have removed the 2% tax from the gaming law and left the $10 million flat fee in place. The bill was sent to the House on their final day in session and plans were added to provide legalization of online gambling as well as fantasy sports. The Senate is not in favor of this expansion and have yet to vote on the measure as it stands.

If the Senate does meet again and vote within the next two weeks, the legislation will die and no changes will be made to the casino host fee as well as online gambling legislation.