Towns of Pennsylvania are seeking a quick resolution to the Casino Host Tax of the state.
On the 28th of September, the Supreme Court of Pennsylvania ruled that the Race Horse Development and Gaming Act was in violation of the Uniformity Clause of the constitution in the state. With the present law, casinos in the state were paying at least $10 million to the local host. However if the $10 million amount was not reached, the casino would pay 2% of their gross slot revenue. This law ended up causing some venues to pay more than others. So Mount Airy decided to file a lawsuit on the matter which resulted in the ruling by the Supreme Court.
Towns Want a Quick Resolution
The Supreme Court gave the state lawmakers 120 days to make a decision on what would be done about the casino assessment tax issue. Towns across the state are now begging lawmakers to work quickly so they can see a resolution to the issue. Towns are paid millions of dollars that are used to fund programs, and without the funds, the cities would not be able to continue with these programs.
Lawmakers are set to meet next week in Harrisburg to consider how the gaming revenue code should be amended. But if the changes come at the same pace as the recent budget, it may be some time before towns see any resolution. It is believed that the Senate and House will work quickly to find a resolution to ensure the tax dollars continue to be placed in the state budgets but the process is just not that simple.
Kyle Foust, a Councilman of Erie County, stated that the ruling has major financial implications for the county budget and this could blow a big hole in it. Gaming money has allowed the county to do important projects in the area that would not have taken place otherwise. This is a stance that counties and towns across the state have. Many local lawmakers are worried about what will happen if a resolution cannot be found and the money is stopped.
One Solution Proposal
The Pennsylvania Department of Revenue has proposed that an obvious solution would be for the legislation to be amended to mandate that a flat local host tax of $10 million be owed. This would be a solution since the casinos were paying varying taxes and this would create one payment for all. The General Assembly will be considering online gaming as well as an option plus daily fantasy sports during a meeting on the 17th of October.
However, while the solution of a $10 million tax may seem like a simple solution, operators are most likely not going to want to pay this. So will legislators consider what casino operators will be willing to pay? Would such an amount make operators shut down services or try to sell out? All of these factors should be considered to ensure that operators are happy and taxes are paid accordingly.
Online gaming and DFS would be able to bring in additional revenues and could make up for any differences found in the tax changes. But will lawmakers finally be able to make a decision on the subject? Since last year, online gambling has been a subject that lawmakers cannot seem to figure out. Everyone has to get on the same page if legislation is to be created that will benefit the state as well as existing gaming operators.
It will be interesting to wait and see just how legislators make decisions on the tax changes and if operators will be happy with whatever is decided.