A Parx Casino rep has called the tax rate outlined in Pennsylvania Senator Gene Yaw’s (R-23) skill games bill “laughably low.”
Pete Shelly, a spokesperson for Pennsylvanians Against Gaming Expansion and Partner and Co-Founder of Clear Point Communications, representing Parx Casino, recently appeared on ABC27’s This Week In Pennsylvania.
On the show, he debated the tax rate of skill games, among other topics, with Pace-O-Matic’s (POM) Chief Public Affairs Officer, Mike Barley.
Skill games have raised concerns over consumer protections and the impact on retail and the PA online casino market.
Shelly calls out Sen. Yaw’s bill, thinks skill games should be taxed at 54%
It appears that the legality of skill games debate is over after the Commonwealth Court ruled them legal last December. The debate has now moved to regulation and tax rate.
Tight regulations and a fair framework should alleviate concerns that come from skill games. However, there are two structures that are completely different. Sen. Yaw introduced a bill that included a 16% tax rate while Gov. Josh Shapiro is proposing a 42% tax.
There is a lack of knowledge on the amount of skill games proliferating in the state, Shelly said. That makes it difficult to know what’s fair. However, he isn’t on Yaw’s side. Shelly said:
“The whole notion that Pace-O-Matic can’t afford [a] 42% [tax rate] is ludicrous. Sixteen percent is laughably low.”
He also called out Yaw’s tax rate in an opinion piece he wrote for the GoErie newspaper last month. Shelly wrote:
“Gov. Shapiro’s proposal recognizes the need for both tax and regulatory parity among slot machine and skill games operations. He has proposed a 42% tax rate on skill games revenue. This is far closer to the 54% tax casinos pay on slot machine revenues than the absurdly low 16% tax that state Sen. Gene Yaw, a leading skill games proponent, has proposed.”
Shelly is obviously on Gov. Shapiro’s side. He believes the games should be taxed at 54%, he said on This Week In Pennsylvania. It’s the same rate as Pennsylvania casino slots.
Pennsylvania skill games regulation and tax structure a big hurdle to overcome
It’s not a surprise that Barley is on the other end of the spectrum. He advocated for Yaw’s Senate Bill, along with Representative Danilo Burgos’ House Bill that moved to the Gaming Oversight Committee in February.
“Table games are taxed at 16% [at Pennsylvania casinos] and I think many people would argue that there’s skill involved,” Barley said on This Week In Pennsylvania. “There’s tax parity when you look at our skill games.
“Plus, I think there has to be acknowledgement that our games are legally operating after a unanimous Commonwealth Court decision. Businesses are paying all applicable taxes, sales and property taxes. This will be an additional tax placed upon them. For a lawmaker, you’re going to go to that American Legion and say I’m going to put a 42% tax on it, it’s difficult.”
Barley went on to say that POM is ready to discuss a tax rate that is fair for everyone involved.
Barley told PlayPennsylvania in February that POM has been seeking regulation for years. The idea is to create a “long-term, stable market” for small businesses.
Should Pennsylvania go with Gov. Shapiro’s proposal of 42% tax, the state stands to generate $421 million in tax earnings from skill games by FY 2028/2029. That is according to the Independent Fiscal Office. The IFO projects the Keystone State would produce $150 million in the FY 2024/2025.
If the state wants to make anything from skill games in the next fiscal year, it better come to a resolution quickly.
