Pennsylvania Auditor General Lambastes State Gambling Commission Expenditures, as Governor Guns for More Casino Taxes

Posted on: February 20, 2016, 12:40h. 

Last updated on: February 22, 2016, 11:12h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Pennsylvania Auditor General Eugene DePasquale (D) says in his audit of the state’s Gaming Control Board (PGCB) that while the commission has made significant improvements since his previous examination, the group needs to take additional action to reign in unnecessary spending.

DePasquale’s primary concern is expenses paid for the travel of board members who took advantage of “enhanced” daily expenditures that provided them with up to two-and-a-half times the normal allotment for state staffers and employees.

While Pennsylvania Governor Tom Wolf is foregoing his $190,823 annual paycheck and working for free, PGCB members collected as much as $177.50 in per diem while crisscrossing the state.

“This issue is about more than just dollars and cents; it is about the perception of a highly paid board, who are statutorily charged with protecting the public’s interest, being allowed preferential treatment,” DePasquale said.

The seven gaming board members are each paid $145,000 for overseeing the state’s 12 land-based casinos, in what DePasquale said is essentially part-time work.

“The issue is bad public policy plain and simple, not just for the gaming control board, but anywhere such exemptions are permitted,” the auditor general declared.

Wolf After Adelson

They’re both rich, though one is worth millions while the other has billions, and they both have substantial stakes in the Keystone State.

Wolf campaigned for the governorship as a business leader who could repair Pennsylvania’s economic woes and overhaul its struggling education system, and he’s looking to “sin” industries to help pay for the expanded funding.

In addition to implementing a $1 tax on every pack of cigarettes sold, the governor is also focusing on Las Vegas billionaire tycoon Sheldon Adelson and his Sands Bethlehem casino to help pay for the state’s $2 billion deficit.

The Sands resort in the eastern part of the state is the most profitable gambling destination by far in Pennsylvania. Its secret to success is enticing residents statewide and in neighboring states with free slot money cards.

In 2015, Sands dispersed $150 million in free money to slots players. The gaming company doesn’t currently have to pay taxes on those promotional funds.

According to The Morning Call, a daily newspaper in the region, people leave behind about $8.5 million each week in free money.

Instead of the Sands being able to reduce their liability to the state by issuing the promo cards, Wolf wants to tax those monies at eight percent. That would put the Adelson property on the hook for an additional $12 million annually.

“No one else is even close,” PGCB spokesman Richard McGarvey said of the Sands’ use of free money slot play.

Adelson Fights Back

As expected, Adelson’s company won’t simply adhere to a new tax structure without first lobbying.

“This proposal is bad for jobs in the Lehigh Valley and beyond,” Las Vegas Sands spokesman Ron Reese said. “There’s certainly no shortage of taxes already being paid.”

Wolf said he’s willing to sit down with casino owners, but that new sources of revenue need to be found to better fund schools and jobs.