Pennsylvania's casino industry will be under the microscope in 2017, as lawmakers look to extract more money from it for public coffers and casinos ask lawmakers for new avenues to expand.
Sen. Kim Ward, R-Westmoreland, has summoned representatives of the state's 12 casinos to Harrisburg for a closed-door meeting in the Capitol on Jan. 3, the day lawmakers are sworn in for the new two-year legislative session. Changes must be made to Pennsylvania's casino gambling law and work should get started early, Ward said.
"The days of doing nothing are over at this point,'' Ward said.
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In just a decade, Pennsylvania's commercial casino industry has emerged as the nation's No. 2 in consumer spending and No. 1 in tax revenue, according to the American Gaming Association.
A top issue is replacing a provision struck down by the state's high court in September that had required casinos to pay tens of millions of dollars to their host communities for the past decade. The court delayed the effect of its decision for four months, until late January, to give lawmakers time to draft a replacement provision.
In a lawsuit filed by Mount Airy Casino in northeastern Pennsylvania, the court agreed the assessment was unconstitutional because it treated the state's casinos unequally, and imposed a heavier burden on lower-performing casinos.
So far, lawmakers have not agreed on how to replace it.
The Senate passed a bill in late October to create a temporary, six-month replacement. But it died in the House and a lawyer for Mount Airy threatened to sue over that, too, saying it was unconstitutional for the same reasons.
Some $141 million in slots revenue was paid in the last fiscal year to counties and municipalities, according to Pennsylvania Gaming Control Board data.
Most casinos have agreed or pledged to continue paying the money. But writing the requirement back into law could prove complicated if Ward and other lawmakers from counties without a casino insist that tax revenue from casino gambling flow to counties like theirs.
A key date is mid-April, when the first quarterly payment is due to local governments.
Meanwhile, lawmakers are looking to squeeze more money from casino gambling to help bandage the state's deficit-ridden finances, and that could also get complicated. Most of Pennsylvania's casinos want lawmakers to allow them to launch online gambling sites. The House approved such a provision in a wider piece of legislation that also would have expanded legalized casino gambling to Pennsylvania's six international airports and as many as 28 off-track betting parlors.
But that bill stalled in the Senate, and one lawmaker who helped write the 2004 casino gambling law, Sen. Robert Tomlinson, R-Bucks, warned House members in a Nov. 18 letter that lawmakers must first restore the provision requiring casinos to pay their host communities.
Some lawmakers also have pressed for the legalization of slot machine-style gambling machines in bars and fraternal clubs, and Rep. Michael Sturla, D-Lancaster, said he is drafting legislation to allow 30,000 or 40,000 such machines to be licensed. That number tracks with the amount that the Pennsylvania State Police say already are operating illegally in Pennsylvania, Sturla said.
Bringing the same number of machines under the law would produce tens of millions of dollars for the state, Sturla said, and should not raise concerns about siphoning business from the Pennsylvania Lottery, which funds programs for the elderly, or draw opposition from casinos.
"Since they already exist, nobody can say that will eat into the lottery, because it won't, and nobody can say that will eat into casinos, because it won't,'' Sturla said.