Pennsylvania Increases Certain Gaming Taxes
After Pennsylvania legislators decided on a budget package, online casino gambling was involved but not certain. Lawmakers are set to return in the fall to decide on how to integrate online gambling in the state but for now have decided to raise taxes in two areas of gaming.
Pennsylvania is set up to the best next state to legalize online casino gaming within the United States, especially after a budget was passed that included language in regards to the option. The government is expecting $100 million to be contributed to the state from online gambling options such as casino and poker gaming but have yet to pass legislation to see the industry come to fruition. The government will be meeting again in the fall to discuss legislation but in the meantime have made changes in two areas of state gaming, raising taxes in the hopes of earning much-needed money to meet the budget shortfall.
Table Game Increase
Since online casino game play is not in the picture, legislators had been working on how to use the gaming industry to bring in more funds for the state. Back in July, the casinos of the state began to pay a higher tax on table gaming revenues, something that casinos were not too happy about. A 2% increase in table game taxes was approved by legislators with taxes going from 14% to 16% overall. The casinos already pay 54% in slot machines taxes, so the state essentially has the highest taxed casino industry in the country.
Table games are expected to bring in around $17 million each year in taxes with the new increase. This tax will expire by January of 2019 unless legislature decides to reauthorize the law. The casino industry was opposed to the proposal and felt the increase came out of nowhere. Many tried to see a positive side to the increase, looking at the tax hike as a way for the state to get a larger cut of gaming revenues from table games while allowing casinos to be involved in the online gambling industry once legislation is in place.
Lottery Taxes Increase As Well
On top of the table game tax, legislators have now decided to increase lottery taxes. This time it is not the operators that will be affected but the actual winners of the lottery. The state of Pennsylvania will now be charging 3.07% in state personal income tax on lottery wins that are over the $5,000 mark. This will be done before players are able to collect prizes won.
The lottery first debuted in the state back in 1972 and this will mark the first time that players have been forced to pay a state income tax. Cash prizes will be taxed but officials decided to not tax prizes such as merchandise and gift cards. Legislators are looking at the new lottery tax as a way to address the budget issues of the state. The tax, which will cover winnings from the 1st of January, is believed to have the ability to generate as much as $16 million in revenues for the fiscal year.
The government has plans to notify the 46,000 lottery winners from earlier in the year who won a cash prize of $600 or more. This amount is what individuals have to report to the federal government during tax files and the government wants to ensure that winnings are reported correctly.
Where Does This Leave Online Gambling
The additional tax revenues will certainly help the state but Pennsylvania is far from being out of debt. Lawmakers seem to still be looking at the online gambling industry as a way to bring additional funds into the state. Reportedly, discussions are set to begin again in the fall, but the exact time frame is unknown. Could be by September or as late as November before lawmakers begin to talk again about iGaming legislation.