American Gaming Association President and CEO Geoff Freeman is joining with casino operators in Pennsylvania to tout the benefits of growing slot revenues in the state as opposition rises to a tax on free-play offers proposed by Governor Tom Wolf.
Earlier this year, Wolf proposed an 8 percent tax on all free play offered to slot players by Pennsylvania casinos, a plan the AGA and casino operators have assailed as akin to taxing grocery store coupons. Free play, currently deductible as a promotional expense by casinos, has arguably been the main driver in growing slot revenues in the state, since the 55 percent slot revenue tax leaves a razor-thin margin for the casinos to offer any other comps or freebies to compete with lower-tax neighbors such as New Jersey.
“The idea of taxing free play makes little or no sense,” Freeman told the Pittsburgh Post Gazette last week. “It is counterproductive. It will cost the commonwealth of Pennsylvania in terms of tax revenue, and will steal dollars away from reinvesting in properties.”
Freeman was in Pittsburgh for a roundtable discussion on the Pennsylvania industry at the Rivers Casino, stated as part of the AGA’s Gaming Votes program to instruct the public on the benefits of gaming and the presidential candidates most likely to support the industry. At the event, Freeman and state Rep. Jake Wheatley, who represents Allegheny County (Pittsburgh is the county seat), continued their assault on the proposed tax, calling it a threat to everything gaming does for the state.
“Bad public policy, such as the proposal to tax promotional credits, is a direct result of a misunderstanding of the many ways in which gaming is contributing to Pittsburgh and communities across Pennsylvania,” said Freeman. “Today’s event paints a portrait of exactly how Rivers and the gaming industry serve as strong community partners, whether it’s through providing good jobs, generating customers for small businesses or contributing generously to charitable organizations.”
“The gaming industry, and especially Rivers Casino, provides a tremendous opportunity to grow our great city,” said Wheatley. “Since opening its doors in 2009, Rivers Casino has been a job creator, an economic engine and an exemplary partner in our local community. That is why I believe that the presidential candidates vying for our votes understand the powerful impact this industry has on the city of Pittsburgh and the Keystone State.”
The event came on the heels of the announcement by the Pennsylvania Gaming Control Board that slot revenue totals in the state have increased continually for the past six months. For March, slot gaming brought in $211 million from the 12 casinos of the state.
The $211.3 million was $3.5 million more than March of 2015 and is the sixth month running that the state was able to see an increase in gaming revenues based on slot machine play.
Also at the Pittsburgh event, Freeman reported that the Internal Revenue Service appears to be backing off its proposal to reduce the threshold for issuance of a Form W2G for slot jackpots to $600 from the current $1,200.
“My understanding is that they have taken a step back from their proposal,” Freeman said. :”They’re going to look at alternative ways, and ultimately work with us to solve the problem that they think exists.”
