The owners of Pittsburgh’s Rivers Casino say a municipal tax based on slot machine revenues is illegal and they’re suing the Pennsylvania Department of Revenue to have the payments refunded.
Holding Acquisitions Co. filed suit in the state Supreme Court, claiming the Local Share Tax, as it’s known, violates a clause of the state Constitution requiring taxes be uniform because casinos must pay $10 million a year to the municipality where they’re based if slot revenues are less than $500 million or 2 percent of annual revenues over $500 million. Also, Philadelphia casinos pay a flat 4 percent, with no $10 million minimum.
The Rivers Casino has paid Pittsburgh about $65 million on Local Share Tax since it opened in 2009.
Rivers won $272 million at its slots last year, third-highest among the state’s 12 casinos, which generated a combined $2.4 billion in machine revenue in the 2015-16 financial year. It was the second straight year of annual gains, up 2.3 percent over 2014-15, but off the record $2.5 billion in 2011-12.
When you consider all the new competition that’s come online, 2.3 percent is good, stable growth,” said Richard McGarvey, a spokesman for the state Gaming Control Board. “From a tax revenue standpoint, that’s a good thing.”
The encouraging year-end numbers show that nine of the state’s 12 casinos posted gains over the previous year, including Sands Casino Resort Bethlehem, which had its best year with $305 million in slot machine revenue—a nearly 6 percent gain. Only
Parx Casino in the Philadelphia suburb of Bensalem let the state with $388 million, followed by Sands Bethlehem, which posted $305 million. Meadows Casino outside Pittsburgh was fourth with $226 million, followed by Mount Airy Casino Resort in the Pocono Mountains in the northeast of the state at $144 million.
With the statewide tax set at 54 percent of gross slot revenue, the state collected nearly $1.3 billion for the year.
The legislature in the meantime is considering a measure to make it easier for casinos to obtain a 24-hour liquor license by lowering the cost.
The proposal would cut in half the $1 million application fee that casinos are to pay to obtain a 24-hour license. The bill also would let casinos sell liquor on a 24-hour basis at off-track betting parlors.
The fee was set in a law signed on June 8 that also provides for expanded wine sales.
The idea of expanding casino liquor sales has been debated by Pennsylvania lawmakers for several years. Most states have liquor laws that apply specifically to casinos, according to a 2014 study on casino competitiveness by the Legislative Budget and Finance Committee. Casinos in Maryland, Mississippi and Louisiana have no last calls for serving alcohol.
