Penn National Gaming Continues Fight Against PA Gambling Expansion

by Kyle Miller

Penn National GamingPenn National Gaming remains vocal against the gambling expansion just recently approved in Pennsylvania.

Unless you have been stranded on a deserted island for the past few weeks, then you most certainly know that Pennsylvania has approved a gaming package that will see the creation of online casino and poker gaming, satellite casinos, airport gaming and host of other changes to the gambling industry. While most have received the changes with open arms, one gaming company operating in the state is not happy, Penn National Gaming. The company has continued to show their displeasure against the expansions and may possibly take legal action against the state.

Gathering Information

Penn National Gaming is currently weighing their options when it comes to taking legal action against the recently passed gaming package. In speaking with Online Poker Report, Senior Vice President for Public Affairs and Government Relations for Penn National, Eric Schippers, stated that the company is analyzing the law, all 470 pages, to find out everything they need to know to move forward.

The company reportedly wants to clarify on gray areas of the new law during an informative session set to take place on the 7th. The PA gaming Control Board will be hosting the sessions for the licensees of casinos currently operating in the state. It seems Penn National will be gathering information to discuss during the meeting and it will not be surprising to see a negative connotation within their discussions on the matters involved.

According to Schippers, the company has an issue with the tax subsidies, tax rate on online slot and the satellite casinos. The representatiave stated that the issues they see are a money grab as legislature decided that they would expand their way out of the budget mess instead of being ‘fiscally responsible in cutting programs and spending’.

The Satellite Casino Issue

To begin, Penn National has a problem with the satellite casinos now available in the state. The new law says that as many as ten satellite casinos can be constructed in Pennsylvania as long as they are located 25 miles or more from an existing gaming venue. The satellite casinos can be placed in rural locations, yet municipalities continue to show disinterest in being a host region. Casinos will had to bid at least $7.5 million to be considered for mini casino licensing and then pay $2.5 million more to be able to include table games.

Penn National Gaming operates the Hollywood Casino at the Penn National Race Course which is located in Grantville. For this venue, at least two-thirds of their customers come from more than 25 miles away. This means the casino will be in competition with a satellite venue, depending on its location, thus why the operator has a problem with the new option in the state.

Slot Tax Issues

One of the big problems with the new changes in the gaming expansion for the state is the online slot tax. Legislators set the tax for online slot gaming at 54%. This is a huge amount and unprecedented for the online gaming industry in the United States. Usually, this amount would be in the 16% range. For table games and poker, the tax rate is 16% in Pennsylvania for online gaming. Operators are not going to be willing to give up such a huge amount of slot revenues, especially considering slots are the most popular form of online gaming available today. Penn National is reportedly looking into online poker and table games and may consider a full license application.

For now, it will be interesting to see what the company finds and presents during the meeting next week.