HARRISBURG -- House Democratic Whip Bill DeWeese and casino executive Robert Soper agree that Pennsylvania should add table games to the 14 casinos that are authorized by a 2004 law.
But Mr. DeWeese, of Waynesburg, and Mr. Soper, who runs the Mohegan Sun racetrack/casino near Wilkes-Barre, differ on how much the state should tax the gross gaming revenues produced by games like poker, blackjack, roulette and dice.
Mr. Soper, supported by casino consultant Steve Rittvo, contended that the tax rate for table games shouldn't be more than 12 percent. That would generate about $165 million in additional revenue for the state.
Addressing the House's Gaming Oversight Committee yesterday, Mr. Rittvo said table games are much more "labor intensive" than slots, meaning it takes more workers, and thus more costs, to operate them. If the tax rate is higher than 12 percent, he said, casinos won't be able to spend money on fancy things that attract gamblers, such entertainment venues, clubs restaurants, spas and hotels.
Mr. DeWeese has introduced House Bill 21, which would slap a 21 percent tax on table-game revenue. Most of that, 18 percent, would go to lower property taxes, as much of the tax revenue from slots already does. There also would be a 2 percent levy for towns and counties that host casinos with table games, and 1 percent for agriculture. A 21 percent levy would generate about $200 million additional for the state, he said.
Mr. DeWeese said he was "open" to lowering the tax, but said the state's current 55 percent tax on slots revenue seems to be working well, even though casino executives have criticized it as too high. That money goes to lower property taxes, to promote economic development (including the Penguins new arena), to bolster agriculture and the horse-breeding industry and to help host municipalities with traffic, police and other costs.
The Rivers Casino in Pittsburgh also supports the addition of table games, "as long as the tax rate is something that we could live with," President Ed Fasulo said yesterday. The casino wants the tax rate to be no more than 20 percent or so, he added.
The casino, to open in August, has 30,000 square feet of space it can devote to table games or extra slot machines. It would take four to seven months to get table games up and running.
Mr. Rittvo is chairman of The Innovation Group, which did a study on the effect of table games for Mohegan Sun and two other casinos, Philadelphia Park and Sands Bethworks in Bethlehem. He said Pennsylvania could benefit to the tune of an additional $165 million in annual gaming revenue, once table games are in operation at all 12 of the state's larger casinos.
With a 12 percent tax rate, he estimated that table games would generate $104 million, and there would be $61 million in additional slots revenue. Table games bring in additional gamblers to play slots, he said.
Mr. Rittvo did say, however, that the national table games tax rate average was about 18 percent, ranging from zero tax at some Native American casinos to 37 percent in West Virginia.
Mr. Rittvo also estimated that adding table games would add 10,000 direct jobs (such as dealers, pit bosses, security camera operators) and 6,000 spin-off jobs in local businesses that serve casinos.
Mr. Soper said the addition of table games "would provide a product that our customers are asking about every day."
Mr. DeWeese has estimated that a 21 percent tax rate would generate about $200 million a year in new revenue. Each casino also would have to pay an upfront license fee of $10 million for table games, which would mean an additional one-time collection of $120 million, once all 12 of the state's larger casinos are operating.
When the Rivers Casino opens, nine of the larger casinos -- those with up to 5,000 slots -- will be operating. But two other large casinos -- to be built in Philadelphia -- and one more planned for Lawrence County won't be open for at least another year and possibly longer. Two smaller, "resort hotel" casinos, with no more than 500 slots, also are authorized by the 2004 slots law but are not yet in operation.
Mr. DeWeese is hoping for a House vote on his bill before the summer recess. Because of the state's huge $3.2 billion budget deficit, Mr. DeWeese may be willing -- for the first three years -- to let the table games revenue go toward erasing the deficit.
He said Gov. Ed Rendell, who had opposed adding table games until all 14 slots casinos were up and running, now says he would consider signing the bill if it's approved by the Legislature.
