Pa. municipalities grapple with implications of casino tax ruling

The Pennsylvania Supreme Court has passed down a ruling on casinos with implications many are struggling to understand.

A law that levies a municipal tax on slot machines at casinos in most of the commonwealth is unconstitutional, the court ruled. That means municipalities could lose a major source of revenue.

With some exceptions, casinos in Pennsylvania pay a minimum of $10 million in slot machine taxes to their host municipalities.

Some goes directly to the municipalities, and the rest goes back to the counties to be disbursed as they see fit.

SugarHouse Casino in Philadelphia is exempt, as are two smaller “resort” casinos: Valley Forge Casino in suburban Philadelphia and Lady Luck Casino Nemacolin in southwestern Pennsylvania.

Mount Airy Casino in the Poconos argued the tax was unfair because it put the same burden on low-performing casinos and more successful ones. The court agreed and gave lawmakers four months to fix it.

Meanwhile, communities with casinos are in the dark.

In Dauphin County, home of Hollywood Casino at Penn National Race Course, Hanover Township Manager Paul Cornell said all he can do is wait to see how the state responds.

“You know, it’s the little kid holding up the paper that he can’t read saying, ‘What does this mean?'” he said.

He said the township relies heavily on several million dollars annually.

“It has been used for things like, 26 bridges that we own. It has been used for the firehouse. Right now there’s a public works building under construction, we hope to pay that off quickly,” he said.

Lawmakers haven’t made any decisions yet.

House spokesman Stephen Miskin said passing a solution before the end of session would be ideal.

And a spokesman for Gov. Tom Wolf says the ruling is “a complex decision, and we are reviewing.”