About a year and a half ago, the Keystone State passed a gambling expansion law that saw the launch of a number of new gambling activities in the state including sportsbooks, online casinos and satellite casinos among other things. The new regulatory regime in the state was widely welcome and lauded for all the developments that came with it even though there are a few issues that have come up. Some of these issues included the exorbitantly high tax rates that the operators have no choice but to deal with. However, one issue that some of the operators could not let slide was a clause in the legislation that shows a certain lack of equity across the state’s gaming industry.
What the Fuss Is All About
In the gaming expansion package that was passed in October 2017, there existed a provision that required the casino operators to part with 0.5 percent of all their slot revenues which would then be put into a Casino Marketing and Capital Development Account. The fancy language that defined this decree basically translated to taking from the better-performing operators and giving to the poorer ones. In other words, the funds that were collected in the account were distributed in a manner that favored the weaker casinos who would use the money for marketing and renovations.
Sands Bethlehem, the operator that filed the lawsuit with the state’s courts, was the first to realize that something was not right and whatever was going on was a violation of state and federal laws. The main complaint was that better performing casinos such as Parx Casino and itself were being forced to share portions of their profits with the weaker gambling properties which also happen to be their competitors.
Pa. Supreme Court to the Rescue
Thankfully, the funds were never distributed since the Supreme Court ordered the funds to be held in the account pending the ruling. Now, the Revenue Department will be required to refund all the casinos as the Supreme Court declared that the system is indeed illegal.
“Act 42 establishes a system specifically designed so that the taxpayers who pay the least into the CMDC Account are the most likely to receive a mandatory distribution from that account (and the less they pay, the more they receive), and vice versa,” Chief Justice Thomas Saylor wrote.
Even though the state is now expected to dole out refunds to the operators, the spokesman of the Revenue Department has said that the department is still in the process of reviewing the court’s decision. It is after this review that the funds will be distributed and, naturally, the biggest contributors are set to receive the largest amounts.
