Pennsylvania casino owners leery of table games tax plan

getty — Wed, 07 Apr 2010 15:37:32 +0000

Casino operators in Pennsylvania pay some of the highest tax rates on their revenues in the nation, a fact many of them point out to state legislators as the General Assembly considers bills to legalize — and tax — table games.

While Pennsylvania’s 55-percent gross tax rate is in line with most states’ racetrack-casino taxes, it is the highest rate in the country for stand-alone casinos. The state Legislature is considering proposals to legalize table games with tax rates from 12 percent to 34 percent, which is closer to the range of tax rates for stand-alone casinos in other states.

Lawmakers also are considering one-time, table games license fees of up to $20 million.

“State officials are kind of trying to balance a desire not to totally open up the state to gambling, but at the same time to have it be profitable for (casino) owners,” said Ian Pulsipher, a gambling policy specialist at the National Conference of State Legislatures in Denver. As budget crises spread across the country, more states have tried to expand gambling, he said.

Pennsylvania has been without a budget since July as lawmakers battle over how to fill a gap initially estimated at $3.2 billion. They are looking at revenue from the tax on table games to help pay the bills.

“State finances are really what drive gambling expansion,” Pulsipher said. “Where we are now is that states are still in a really tough financial spot. They’ve already been making cuts to everything they can cut. Gambling is one of the few revenue opportunities out there that doesn’t involve raising taxes.”

At least one Pennsylvania casino said it will not add table games if the tax rate is too high. Owners of the Meadows Racetrack & Casino in North Strabane are backing a bill that taxes table games at 12 percent and charges a $10 million license fee.

“We want people to understand, if the tax rate and the fees are too high on table games, it simply won’t work for us,” said casino spokesman David La Torre. With the millions of dollars in regulatory fees paid to the Pennsylvania Gaming Control Board, the casino pays close to 60 percent of its gross revenue to the state, he said.

“We’re not going to do table games if it doesn’t make sense,” he said.

The lowest tax rate on stand-alone casinos is Nevada’s 8 percent, according to data from the American Gaming Association. The highest, behind Pennsylvania’s, is Illinois, where the graduated tax rate can surpass 50 percent, but averages 36.1 percent.

Racetrack casino tax rates range from a low of 23.2 percent in Iowa to Rhode Island’s 72.7 percent tax rate

By Mike Wereschagin

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4, including Nemacolin, likely to seek resort license

ssp — Tue, 19 Jan 2010 05:39:14 +0000

A Fayette County resort that wants to offer slots and table games will have to beat out at least three other competitors for the state’s only remaining resort gaming license.

Nemacolin Woodlands Resort in Farmington on Tuesday filed an application with the state Gaming Control Board for the license. The license, of which only one is available statewide, allows resorts to have up to 600 slots machines and 50 table games such as poker, blackjack, roulette and dice.

Two other resorts had filed applications for the same license, and a fourth has indicated its intentions to do the same before the open application period ends April 7.

The others that have filed are Bushkill Group, which wants to add slots to Fernwood Hotel and Resort in the Pocono Mountains, Monroe County, and Wyo Gaming, which is seeking a license for slots at the Crowne Plaza Reading Hotel in Wyomissing, Berks County.

A fourth application is expected to be filed before the deadline by an Adams County businessman, David LeVan, who earlier this month announced plans to open the Mason Dixon Resort & Casino in Cumberland Township.

Spokesmen for two of the resorts, Nemacolin and Mason Dixon, yesterday expressed confidence their applications will ultimately win approval.

Jeff Nobers of Nemacolin said the Farmington hotel has the edge because it is an established resort and has partnered with Isle of Capri to manage the casino.

“We are clearly the only one, if not in the letter of the law, certainly in the spirit of the law, that is a full-blown resort,” Nobers said. “We can be up quickly.”

A facility must be a “well-established Pennsylvania resort hotel with no fewer than 275 guest rooms under common ownership” to qualify for a resort gaming license, according to the Gaming Board. Other conditions include the availability of year-round amenities that include health spas, meeting and banquet facilities, golf courses, skiing and restaurants and entertainment facilities.

Isle of Capri, which owns and operates 14 casino properties in six states and the Bahamas, plans to open its Lady Luck Casino at Nemacolin at Route 40 and Smith School Road in Wharton. The location houses the resort’s Wild Side entertainment complex, which formerly was a Woodlands World outdoor store.

David La Torre of Mason Dixon said the Adams County location is more desirable because it won’t compete with existing casinos.

La Torre noted that Nemacolin is within easy driving distance of Rivers Casino in Pittsburgh and Meadows Racetrack and Casino in Washington County. Fernwood would compete with two other casinos in the Poconos, he said, and Wyo Gaming with Philadelphia-area casinos.

“Our casino would be in the only location that would not cannibalize other Pennsylvania casinos,” La Torre said. “We have the opportunity to tap into new markets in Maryland and Virginia, and in doing so, not compete with our own state casinos. That’s a win-win for everyone.”

The Mason Dixon casino would be located within two miles of the Maryland border, La Torre said. Plans are to open the 300-room resort and casino in the current Eisenhower Hotel and Conference Center and Allstar Funland in Gettysburg, Cumberland Township.

Nobers said Nemacolin officials do not feel that they will compete with casinos in Pittsburgh or Washington County because 60 percent of its guests come from out of state. He said a casino at Nemacolin would attract visitors from Somerset and Cambria counties, who otherwise might not want to travel to Pittsburgh to gamble.

Officials with Fernwood and Wyo Gaming could not be reached yesterday for comment.

Once the April 7 deadline has passed, applications will be reviewed for completeness before the applicants are subjected to a background investigation, said Doug Harbach, a spokesman with the gaming board.

Public hearings would then be scheduled in the municipalities where the casinos are to be located, followed by a licensing hearing in Harrisburg.

The successful applicant will have to pay a one-time fee of $5 million for a slots-only license or $7.5 million for a slots license with a table games certificate. A slots-only license allows up to 500 slots machines. A slots license with a table games certificate allows for up to 600 slots machines and 50 table games, with the ability to add up to 15 additional table games for poker tournaments.

By Liz Zemba