William Paulos, principal of Cannery Casino Resorts, used last week’s relicensing hearing for Cannery’s Meadows Racetrack and Casino outside of Pittsburgh to ask regulators to remove the handcuffs the current law imposes on Pennsylvania casinos’ ability to court high rollers.
At the license renewal hearing, held by the Pennsylvania Gaming Control Board at the Washington, Pennsylvania, casino, Paulos produced numbers he said show Meadows has lost nearly $7.3 million in slot revenues to out-of-state venues since 2011. The problem, he said, is that the 55 percent slot revenue tax in Pennsylvania leaves little room for promotional expenses.
The solution Paulos offered is to change the rules to allow Pennsylvania casinos to deduct promotional expenses directly from gross gaming revenues, as is the case in states like Nevada and New Jersey. This, he said, would free up casinos to pay for travel and free rooms to lure out-of-state high rollers. (A hotel opened adjacent to the Meadows last year.) The only tax-free perk that Pennsylvania casinos currently can offer is free slot play—not exactly the royal treatment.
Paulos told the board the plan would capture new business for the casino and new revenue for the state. “This is business we’ve either lost and can’t get back because of the new competition or just people who don’t come here because they don’t get enough of an incentive to come past the casino they’re presently going to,” he said.
Paulos also spoke in favor of a proposal currently being mulled by lawmakers to allow casinos to place slots at off-track betting parlors. Placing 100 or 200 slots at OTBs, he said, would create a new revenue stream. “You’re creating a lot of new business,” Paulos said. “You’d be helping the racing industry, creating much better handle and just another good venue.”
