Pennsylvania’s land-based casinos have appealed to the state’s highest court, requesting either the same tax rate for skill games as slot machines or a declaration of the current tax structure as unconstitutional. Casinos in the state currently pay a tax rate of 48% to 54% on slot machine revenue.
Skill games, which have become popular rivals to slot machines, are not subject to any taxes or regulations despite their widespread availability. The American Gaming Association reports nearly 70,000 skill game terminals in Pennsylvania, found in various locations such as bars, restaurants, convenience stores, and gas stations.
Casinos argue that this disparity creates an unfair playing field. “There is no basis for requiring licensed entities to pay about half of their slot machine revenue to the Commonwealth while allowing unlicensed entities to pay no tax on such revenue,” the operators stated in their legal claim.
Casinos Push for Change
Out of Pennsylvania’s 17 casinos, 12 support the petition filed with the Pennsylvania Supreme Court. Notable supporters include PENN Entertainment and Caesars Entertainment, alongside Harrah’s Philadelphia, Rivers Casino Pittsburgh, and Rivers Casino Philadelphia. Others joining the legal battle are Parx Casino, Parx Casino Shippensburg, Hollywood Casino at Penn National Course, Hollywood Casino Morgantown, Hollywood Casino York, Hollywood Casino at The Meadows, Wind Creek Bethlehem, Live! Casino Pittsburgh, and Live! Casino and Hotel Philadelphia.
The land-based casino sector pays nearly half of its slot machine revenue to Pennsylvania. Last year alone, casinos contributed over $1 billion in tax revenue to the state. However, the newly filed petition could put this revenue at risk, depending on the court’s decision.
The casinos emphasize that the lack of regulation and taxation on skill games undermines their businesses. They seek a level playing field to ensure fairness and consistency in the state’s gaming industry.
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