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PA Lawmakers Try To Quickly Solve $120 Million Casino Host Fee Problem

Pennsylvania state capitol
Pennsylvania lawmakers continue to bicker over the details of casino expansion. Online gambling is not the only issue they are addressing either.

Certainly, if and how to regulate online casinos is a huge part of the debate, but another issue is the very pricey problem of casino host fees. With $120 million in government revenue on the line, lawmakers are trying to handle the host fees with a separate solution. Ideally, the legislature should vote on the bill almost immediately after returning from recess on May 22.

Local governments scrambling since host fee deemed unconstitutional

For several years, the 12 Pennsylvania casinos each paid an annual casino host of $10 million or two percent of gross slot revenue, whichever was bigger. Last year, Mt. Airy Casino, one of the smaller casinos in the state, decided to fight the law.

Mt. Airy sued the state, claiming the fee unduly punished smaller casinos. The state Supreme Court agreed the tax was not fair. Since then, the local governments and casinos have been scrambling for a solution.

Some casinos agreed to voluntarily pay the fee. Others, like Sands Bethlehem, plan on paying no more than the state requires.

That kind of money goes a long way on the local level, so now politicians are scrambling for a solution.

House Bill 271 separately addresses casino host fee

State Rep. Patrick Harkins is unwilling to wait and see if the host fee is handled in casino expansion legislation. Instead, he introduced a standalone bill, House Bill 271.

The bill proposes a couple of solutions for local governments reliant on casino contributions. Measures include a flat $10 million fee on Category 1 and Category 2 casinos as well as airport gambling proposals.

“I wanted to be reasonable and not ruffle too many feathers while still trying to be fair to the taxpayers of Lebanon County and the City of Erie, respectively,” Harkins told the The Record Herald.

The legislation also proposes revenue sharing for county and city governments. Harkins represents Erie County, which is quickly approaching a May 26 deadline stipulated by the Supreme Court to reach an alternative solution for the casino host fee. The original deadline was Jan. 26, but the courts granted the state an extension.

Senate to act on casino legislation shortly after May 22

The state House and Senate will be back from recess starting May 22. That leaves a very narrow window to finalize and vote on HB 271 in time for the May 26 deadline.

Nonetheless, local lawmakers are very confident they can get it done.

“At least on the Senate side, the intent is to get the legislation done,” Sen. Dan Laughlin assured GoErie.

Harkins, on the other hand, is a little less optimistic:

“It’s not contentious, but when you get a solution in one area, someone from another area wants the same or more. Then you add in the Senate and it gets sticky. I really believe the solution now won’t come until mid-to-late June during the budget negotiations.”

Either way, the issue is at the forefront of the minds of most of the Pennsylvania legislature. With that in mind, there will almost certainly be some sort of movement on the casino front next week.

About

Jessica Welman is the managing editor of PlayPennsylvania. A longtime poker media presence, Jess has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and served as the managing editor for WSOP.com.