Casinos in the Pennsylvania will be paying more tax for its winnings on tables games from now on.
The change for table games
As part of a revenue package approved by the legislature and signed by Gov. Tom Wolf earlier this month, the tax rate will increase on table-game revenue for Pennsylvania’s casinos.
The rate will go from 14 percent to 16 percent; that increase is expected to generate an additional $17 million for the commonwealth.
That’s a relatively small amount in a budget that totals more than $30 billion. But lawmakers were creating a patchwork of revenue-generating measures that would make up the $1 billion shortfall between a spending package and revenue currently used to fund the government.
The table games tax rate was not a part of an earlier gambling expansion package passed by the House.
Impact on online gambling?
Meanwhile, the chances of legal Pennsylvania online casinos and poker rooms is looking good. As part of budget negotiations, $100 million is being counted on from gambling expansions in the state.
The bulk of that is expected to come from licensing fees and taxation of online gambling, from a bill that has not yet been passed.
The scope and language of the gambling expansion is not yet finalized, but it’s expected to come up this fall, as soon as September.
According to Online Poker Report, the $17 million increase in taxes on table games should not affect whether online gambling is considered this fall.
Who gets hurt by the table games tax?
Every casino is going to feel the pinch, to some extent. They will all be paying more to the state coffers, unless they have a particularly poor or bad run for the fiscal year in paying out casino guests.
That’s borne out in the PA gaming revenue numbers for the fiscal year that were just released. Sands generated $228 million on table games for FY 2015-16, more than $70 million more than second-place Parx.
Sands wasn’t terribly pleased with the increased tax, according to the Morning Call:
“We spent a lot of time fighting some of the other stuff. This one sort of came out of nowhere,” said Sands CEO Mark Juliano. “We’re not happy about it, but it doesn’t stop us in our tracks. [Pennsylvania] is already the highest tax environment for casinos, but we’ll deal with it.”
Like Juliano implies, the tax rate is not a killer for casinos, it just eats into its profits. But, it’s the new reality that PA gaming facilities must deal with.