Those nerves became a little less frayed when Pittsburgh Mayor Bill Peduto announced the city council tentatively approved a deal with Rivers Casino for $10 million in gambling tax money.
Details of the decision were sparse, but the development is a promising one. According to Trib Live, a final decision about the deal will be made before the end of year. Several PA casinos have already come to similar agreements with their host jurisdictions while the state legislature works on a fix.
The Associated Press reported that the deal, should it be finalized, would save 20 paramedic and 45 parks jobs, along with 25 percent of its public works workforce and entire recruiting classes of firefighters and police.
Mount Airy led the charge to the Supreme Court
Its argument was that the host-fee stipulation wasn’t fair to all casinos. The law stated that casinos have to pay their host cities and counties two percent of their gross slot machine revenue or $10 million, whichever is greater. No casino earned enough to meet the two-percent rule, so $10 million was the standard.
For big earners like Parx Casino, the fee wasn’t a big deal. According to The Morning Call, the $10 million was 2.8 percent of Parx’s take. The same fee represented seven percent of Mount Airy’s revenue.
While Mount Airy was the most outspoken critic of the host fee, they weren’t the first. Rivers Casino and Harrah’s Philadelphia took similar cases to court but were not successful.
Window of time available for deals with casinos
The Supreme Court’s decision initially sent shockwaves through Pennsylvania’s host cities and counties.
Axing the fees meant that casino-hosting cities and towns were faced with the possibility of entering the new year with $10 million less in their budget. Cuts were inevitable, leaving many to wonder how devastating the court’s decision would be.
But it didn’t turn out quite as doomsday-ish as it was made out to be as casinos attempt to work out deals with counties and cities while the legislature works on the issue.
Rivers dropped lawsuit in July
Pittsburgh’s deal with Rivers is certainly an encouraging sign considering the cutbacks the city faced if it could not come up with a plan for the $10 million hole in its budget.
What’s interesting about this particular deal is that Rivers was one of the original critics of the two-percent/$10 million fee. As mentioned earlier, the casino brought suit against the state’s Department of Revenue and Secretary Eileen McNulty this past June, but dropped the suit about a month later.
At that time, Peduto was quite clear he had no sympathy for the casino, noting that Rivers knew about the fee when it applied for the license and complained about nothing at that time.