Pennsylvania Budget Talks Continue As I-Gaming Regulation Remains On TableCasino Industry Hasn't Grown In 3 Years, Contributing To Budget Crisis |
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Pennsylvania is facing a budget deficit of more than $2 billion by next year, and there was still no agreement through the first week of October on a budget. According to The Morning Call, a budget proposal was defeated this week by the Republican-controlled House, with some lawmakers still calling on the governor’s budget plan to include online gaming regulation.
The report said that there is still no end in sight for the budget discussions, as Thursday marked 100 days without a 2015-16 budget. The state government is still up and running for now.
Pennsylvania concluded in a study that regulated online poker could be worth up to $129 million annually once it reaches maturation. It also found that house-banked online casino games could reach $178 million annually under the same conditions.
One of the concerns with online gaming proposals in Pennsylvania this year has been the tax rate. Proposals have ranged from 15 to 54 percent of gross Internet gaming revenue.
The reason why online gaming would be beneficial to the state’s gaming industry is because casino gaming revenues haven’t grown in the Keystone State for the past two years. A new casino is planned for Philadelphia and that is projected to generate an additional $300 million per year in gaming revenue, but it’s years away still. It also needs final state approval.
It would be the state’s 13th casino.
Here’s a look at gaming revenue in Pennsylvania by year:
2006: $31,567,926
2007: $1,039,030,723
2008: $1,615,565,758
2009: $1,964,570,480
2010: $2,486,408,061
2011: $3,024,772,959
2012: $3,158,317,863
2013: $3,113,928,591
2014: $3,069,077,597
2015: TBD
Total gaming revenue generated since the first casino opened in Pennsylvania was more than $19.5 billion through the end of 2014. Through the end of the 2014-2015 fiscal year, the total amount of tax revenue from the play of slot machines and table games reached more than $11.4 billion since the opening of the first casino in November 2006. Slot machines are taxed at a roughly 55 percent rate while table games are taxed at 14 percent.
Twelve percent of the table games’ tax goes to the state’s general fund. None of tax revenue from slot machines goes to the general fund. Casinos were legalized roughly a decade ago primarily to provide some property tax relief, which hasn’t come, according to a report from Pennlive.com.
Other places where casino tax revenue goes to includes the state’s horse racing industry, local and county governments and the Economic Development and Tourism fund.
Pennsylvania is the number two casino gaming market in the country behind Nevada, so casino revenues being lackluster hasn’t been a reason for the budget crisis. While a 10-percent boost in gaming revenue due to the regulation of online casino games wouldn’t come close to solving the budget crisis, it is considered to be one of many ways to help without raising taxes on Pennsylvanians and to keep the casino industry there competitive. Neighboring New Jersey has a growing online gaming industry, and it just recently gave a license to PokerStars, the world’s largest online poker site.
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