A component of Pennsylvania’s 2017 gambling expansion law was struck down late last month.
The legal challenge was led by Sands Casino Resort Bethlehem, owned by Las Vegas casino magnate Sheldon Adelson. The lawsuit argued that provisions in the law that called for the state’s top-performing casinos in terms of slot revenue to send some of that money to the worst-performing casinos was unconstitutional. That 2017 gambling package was the vehicle for Pennsylvania online gambling and sports betting.
The Morning Call reported that Sands is getting a seven-figure tax refund thanks to the Pennsylvania Supreme Court striking down the law. The ruling was a unanimous 7-0 decision, which came nearly a year after the high court heard oral arguments.
From the rich to the less rich
The law called for 0.5% of gross terminal revenue to go to the state’s newly created Casino Marketing and Capital Development Account, funds that would have been available to the smaller casinos, such as Mount Airy and Presque Isle Downs. However, even casinos like Harrah’s Philadelphia and SugarHouse would have benefited from the account to the tune of seven-figure sums.
PID and Mount Airy were slated to receive the largest payouts — $4 mm apiece. Effectively, the top casinos in the state would have helped pay for their rivals’ marketing. That obviously raised some eyebrows. Pennsylvania is slated to soon kick off online gambling, which will fully develop the state’s so far lackluster sports betting market. Marketing and building/maintaining brand awareness is crucial right now thanks to the influx of new gambling options in the increasingly crowded Keystone State gaming landscape.
Parx Casino, the state’s top casino in slot winnings, also benefits from the PA Supreme Court decision.
According to The Morning Call, there’s about $21 mm in the aforementioned account, none of which was yet granted to boost the state’s worst-performing casinos. The account was effectively frozen pending the high court’s decision. Sands filed suit in late 2017.
The $21 mm will be returned to the casinos. The state hasn’t provided casino-by-casino figures on the tax refunds.
Here’s a look at the slot revenue breakdown by casino in 2018:
- Parx Casino: $411,481,328
- Sands Casino Resort Bethlehem: $299,073,577
- Rivers Casino: $281,405,007
- Meadows: $211,098,502
- Hollywood Casino: $206,470,185
- Harrah’s Philadelphia: $200,066,211
- Mohegan Sun Pocono: $198,384,600
- SugarHouse Casino: $180,735,951
- Mount Airy: $146,061,593
- Presque Isle Downs: $115,519,691
- Valley Forge: $91,323,919
- Lady Luck Nemacolin: $28,264,639
The state’s casinos already fork over more than 50% of their slot revenue to the state and local governments, so even a 0.5% tax for the Casino Marketing and Capital Development Account was something that didn’t sit well with some of the casinos.
The victory for Sands comes as its sale to Wind Creek Hospitality is pending. Wind Creek, an affiliate of the Poarch Band of Creek Indians in Alabama, is acquiring the property for $1.3 billion.