Pa. Supreme Court strikes down tax paid by casinos to host communities
Pennsylvania's highest court is striking down the tax that casinos pay their host communities, potentially devastating local budgets around the state.
The Pennsylvania Supreme Court ruled Wednesday that a “local share assessment” is unconstitutional because it treats the state's 12 casinos unequally.
That was an issue that Pittsburgh's Rivers Casino had raised, but it dropped its lawsuit in July.
A state Senate Republican spokeswoman says the move could have “far-reaching” effects.
Under the state's original 2004 casino law, casinos must pay at least 4 percent of gross slot-machine gambling revenues to their host communities. That includes 2 percent to counties and 2 percent or $10 million, whichever is greater, to municipalities.
The Pennsylvania Gaming Control Board says about $140 million was paid in the last fiscal year to counties and municipalities, including the $10 million host fee paid by some casinos.
“We have our lawyers reviewing the court's opinion, and have already started working with our legislative delegation to preserve the commitment the casino made to the residents of the city as a condition of the issuance of the license,” said Katie O'Malley, a spokeswoman for Pittsburgh Mayor Bill Peduto.
The court says it is staying its decision for four months to give the state Legislature time to come up with a solution.
Rivers Casino in July dropped without explanation a lawsuit that it had filed against the state challenging the constitutionality of the gambling tax it pays to the city.
Rivers attorneys had claimed the municipal portion of the local share tax in the state's Gaming Act unlawfully applies different tax rates to Pennsylvania's 12 operating casinos and doesn't tax all casinos equally in terms of revenue from slot machines that goes to municipalities.
Rivers declined comment Wednesday on the Supreme Court ruling.
But similar lawsuits by Mount Airy and Harrah's Philadelphia casinos remained pending.
Mount Airy Casino in northeastern Pennsylvania's Pocono Mountains had argued that it violates the state constitution by imposing a heavier tax burden on lower performing casinos.
Gov. Tom Wolf's office declined comment on the ruling.
