Penn National Gaming is claiming they’ve got a lot to lose in the wake of lawmakers’ decision to allow satellite casinos and tax online slots and table games at the same rate as brick-and-mortar casinos.
Eric Schippers, the racino’s senior VP for public affairs and government relations, vented to Online Poker Report about his frustrations.
“This was a money grab, plain and simple. The legislature decided that, rather than being fiscally responsible in cutting programs and spending, it would try to expand its way out of a budget mess. So they’ve done it in a way that will result in significant cannibalization. And the tax rate on online slots is just ridiculous and unprecedented.”
Taxes are too high, satellites too close
Schippers’ argument is one that may very well be the cornerstone of arguments from other casinos in the state.
Many of Penn’s customers drive from more than 25 miles away to gamble at the company’s Hollywood Casino property.
The new gambling law requires that satellite casinos are located at least 25 miles from an existing casino. However, there’s a legitimate chance in its mind that Penn will lose customers if a satellite is built in areas where commuter gamblers live.
Schipper said that casinos located in cities don’t have to worry about the 25-mile rule. According to him, most of their customers come from within a 25-mile radius. Philadelphia’s SugarHouse is a good example.
Taxes for online slots, table games is too high
Schippers also railed against the state’s decision to tax online slots and table games at the same rates as brick-and-mortar casinos. Those rates are 54 percent and 16 percent, respectively.
He argued that the marketing and operation costs for online slots is far higher than B&M casinos. This means there’s a smaller margin for profit after the 54 percent tax.
“We know the tax rate on slot machines doesn’t make sense and will continue to be an advocate for a lower tax rate, but we haven’t ruled anything in or out,” Schippers said.
Other beefs that Penn National has with the gambling bill:
- Requirement to pay into the marketing budgets of smaller casinos
- Generous satellite buffer zones for Mount Airy Casino
Schippers says Penn might be interested in bidding on one of 10 satellite casinos, a move that will cost the property a minimum bid of at least $7.5 million, with a $2.5 million fee tacked on to operate table games.
Each satellite will be allowed up to 750 slots and 40 table games.