Casinos in the state of Pennsylvania will begin to pay a higher tax rate on the revenue of table games beginning next week after state legislature decided to add the tax to bring much needed revenues to the state. The tax rate is 2% higher than what was set previously, going to 16% from 14%. The casinos already pay 54% on slot machines which is the highest tax rate in the casino industry of the United States. It is believed that the rate increase will be able to generate as much as $17 million more a year for the state, with the change set to expire by January of 2019, unless legislature decides to reauthorize the tax.
The Pennsylvania casino industry is not happy with the change with several officials of local venues speaking out. Some felt as though the tax increase came out of nowhere while others look at the increase as a compromise of sorts, with the casino industry being given the option to offer online gambling in the foreseeable future in exchange for paying a higher tax rate.
The tax increase for table gaming seemed to slip in quietly as talk of online gambling took precedence. Legislation for online poker and casino gaming has been postponed until the fall as the omnibus gaming reform bill is being finalized. The state desperately needs the money that online gambling could provide as well as additional gaming expansions within the state. The state is counting on $100 million from the gaming industry to help balance the budget and the just over $31 billion set to come from the table game tax bill is not enough to cover this amount.
For now, casinos will have to start paying more for table games in lieu of taxes and wait to see if online gambling will come in to play. If online gaming were allowed in the state, casinos could team up with online operators to offer gaming which could lead to additional streams of revenue, hopefully making up for the amount paid in additional table game taxes.
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