CASINO

Pennsylvania slots revenue rises second straight year; Rivers sues over slots tax

TAGs: Pennsylvania, rivers casino

pennsylvania-rivers-casino-slots-tax-lawsuitPennsylvania casinos’ annual slots revenue rose for the second year in a row although the total fell short of the state’s all-time record.

According to figures released Thursday by the Pennsylvania Gaming Control Board, the state’s 12 licensed slots operators generated revenue of $2.39b in the 12 months ending June 30. The gains came despite June’s monthly haul falling 1% to $190m.

The annual figure is 2.3% higher than the statewide total in fiscal 2014-15 but still less than the $2.5b peak recorded in 2011-12. Given the onerous 54% tax applied to slot revenue, the state’s share of this year’s revenue came to $1.3b. The Board will issue casino table game numbers later this month.

Nine casinos posted year-on-year slots gains, led by Parx Casino with $388m, while Sands Bethlehem had its best year ever at $305m. Rivers Casino ranked third with $272m, although this was down 2.1% from the previous year.

Speaking of Rivers, the Pittsburgh casino’s parent company Holding Acquisitions Co filed a lawsuit against the state’s Department of Revenue in the state Supreme Court last month, claiming that a municipal tax on slots revenue is illegal.

The Local Share Tax requires slots operators to pay $10m if their annual slot revenue is less than $500m, or 2% of revenue if their total haul exceeds $500m. But casinos in Philadelphia pay 4% of their slots revenue with no $10m minimum.

The lawsuit argues that the tax isn’t uniform and thus violates both the state constitution and the equal protection clause of the US Constitution. Holding Acquisitions further argues that the tax is “arbitrary, unreasonable [and] not related to a legitimate government purpose.”

Should Rivers’ succeed in forcing the state to return the $65m it has paid Pittsburgh since the casino opened in 2009, other state casinos could seek similar refunds, possibly costing local municipalities hundreds of millions of dollars.

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