New Pennsylvania gambling tax takes a big bite out of Sands

Pennsylvania wants to dig deep into Sheldon Adelson’s pockets to fill the state’s gaping budget hole.

New Pennsylvania gambling tax takes a big bite out of SandsStarting next week, the state will levy a higher tax on table games of 12 casinos operating in Pennsylvania – and the biggest part of that will come from Sands Casino Resort Bethlehem.

News website The Morning Call has projected that Sands will shell out some $4.6 million a year after legislators approved the tax increase from 14 percent to 16 percent in order to sustain the state’s $31.6 billion budget for 2016-17.

Casino operators – led by Sands – have spent months objecting to the propose tax hike, saying that higher taxes usually lead to fewer free meals, rooms and gambling for the millions of people who wager in casinos statewide each year.

Sands reportedly paid $32 million worth of table game tax after it posted a $228 million profit, more than the gross table revenues of Parx Casino and Mount Airy Casino. If Sands has the same revenue this year, that tax hit would increase to nearly $37 million.

“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, which was quoted by the news report. “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.”

The tax hike, however, is just the tip of an iceberg as far as the threats to Sands’ operation in Bethlehem is concerned. Pennsylvania lawmakers are looking for ways to get more gambling money to achieve its $100 million target.

This year alone, legislators have proposed permitting online gambling, fantasy sports betting, allowing clubs and taverns to have video poker, and putting slot machines in airports and off-track betting facilities.

There was also a proposal to implement the concept of new competition at every corner bar but the idea was defeated after casinos struck a compromise with lawmakers on the proposed tax hike on table games.

“We were searching for revenue to fill the hole, and this one turned up on a menu of options,” said Sen. Pat Browne, R-Lehigh, chairman of the Senate Appropriations Committee, according to the news report “This was one that we thought could gain a majority.”