Sheldon Adelson Won’t Pay $10 Million Pennsylvania Fee Unless Required

Posted on: December 21, 2016, 06:00h. 

Last updated on: December 21, 2016, 03:19h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Sheldon Adelson isn’t in the giving spirit this holiday season.

The Las Vegas Sands billionaire’s resort in Bethlehem, Pennsylvania, will not pay a $10 million local share tax to the casino’s host city after the state’s Supreme Court deemed the requirement unconstitutional.

In September, Pennsylvania’s high court ruled the casino tax violated the state’s Uniformity Clause.

Since the Keystone State legalized standalone gambling properties in 2006, casinos have been paying two percent of their gross slot revenue, or $10 million, whichever is greater, to their host municipalities each year.

Since no casino has grossed $500 million from slots in a given year, each operator has been reaching the $10 million plateau on varying supplemental payments.

Local governments heavily rely on their casino assessments, and the millions of dollars account for the majority of operating expenditures for many towns in Pennsylvania.

Some casinos across the state have recognized that fact and have agreed to continue paying the $10 million through temporary agreements.

One that hasn’t is Sands Bethlehem. The richest casino in the state says it will follow the law of the land and continue to monitor the developments in Harrisburg.

Delayed Reaction

The Pennsylvania Supreme Court postponed the impact of its September ruling by four months. The judges acknowledged the severe consequences its casino share verdict would have on small towns and cities across the Commonwealth.

The 120-day delay was to give the legislature in Harrisburg time to find a creative way to make sure each casino continued to adhere to the agreements they signed and sustain sending $10 million to their regional government.

But the General Assembly adjourned for the year and failed to act on an amendment. Governor Tom Wolf (D) has said he’ll do whatever it takes to bring the Republican-controlled House and Senate together to reach a deal.

Casinos make quarterly payments on the $10 million fee. The next scheduled disbursement will come January 15, meaning lawmakers will have until April 15 to find a resolution before gambling companies could legally keep the funds in their own checkbooks.

Pressing On

A seemingly simple fix would be to change the casino law to mandate casinos all pay a flat rate of $10 million per year to their host city. Lawmakers say it’s more complicated than that.

“There are no guarantees,” State Senator Pat Browne (R-District 16) told The Morning Call this week. “But we’ll be working as quickly as possible toward a fix.”

Penn National Gaming, owners of Hollywood Casino near the state capital, has pledged to continue sending payments. Rivers Casinos in Pittsburg has also said it won’t miss a local share distribution.

The Bethlehem City Council approved its 2017 budget this week assuming checks from Sheldon Adelson’s casino continue to arrive. The $10 million makes up a substantial chunk of the northeast Pennsylvania’s city’s $74 million general fund.

The state’s 12 land-based casinos generated $249.6 million in revenue last month, a 1.4 percent decrease compared to the same month in 2015.