Pennsylvania Slot Tax Too High

With the advent of gambling and slot machines coming to Pennsylvania, many of the larger companies are interested in bringing their business to the state.  Pennsylvania has had interest from many of the big players, including MGM Mirage, Ameristar, Haraah’s, Las Vegas Sands Corp., Boyd Gaming, Aztar Corp., Pinnacle Entertainment, and Planet Hollywood. There are 16 applicants for five stand alone casinos, which are slated to be built in Philadelphia and Pittsburg, as well as two other undetermined sites. They are looking to do a total of 14 gaming sites, five casinos, seven racetrack-casinos as well as two resort–area sites-- all sites are anticipated to operate slot machines. There will be four racinos (race-tracks with either casinos or slot machines) as well at four existing horse racing tracks and two tracks under construction. There will also be one harness racing track that will be allowed to apply for the seventh racetrack license.

The problem isn’t the interest in bringing gambling to the state, the problem is the tax that Pennsylvania is charging to bring it there. They have initiated a 53% tax rate on all gross gaming revenues. Many companies feel this is too high, and at least two have already lost interest in the state. Senior Vice President of MGM Mirage Alan Feldman says, “Simple reality, the tax rate is just too high… Pennsylvania is a fine place, but at that level, there are too many other places where we could put our money and get a better return.”

Ameristar Casinos changed their minds as well, and have decided to put their money into their existing casinos instead of Pennsylvania. They, along with other gaming analysts, just don’t feel that the return on that kind of investment is worth it with a tax on revenue that is placed that high. The slot machines and casinos will just not bring in enough revenue to justify setting up casinos in Pennsylvania.


 

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