Today marks the one year anniversary of the Pennsylvania Supreme Court’s decision on the local share assessment (host fee) that casinos pay to the county and municipality that they are located in under the 2004 gaming law. The Court held that the language violated the uniformity clause of the Constitution since casinos had to pay the greater of 2% of their gross terminal revenue or $10 million to the host municipality.
In Fiscal Year 2016-17 $81.2 million in host fees were collected from ten category 1 (horse racing casino facilities) and category 2 (non-horse racing casino facilities) in the state, ranging from $14 million at Parx (Category 1 in Bucks County) to $4 million at Presque Isle (Category 1 in Erie County). During the fiscal year the Supreme Court rendered its decision (September 2016) and gave the General Assembly 120 days to craft a fix (until January 2017). This deadline was extended to May of 2017, which is when the Gaming Control Board data shows was the last month with a positive number for host fees from any casino. In June, July, and August of 2017 (the latter two months are part of FY 2017-18) there are zeroes across the board for host fees.
The table below shows the total host fees collected in FY 2016-17:
Many of these casinos have made voluntary arrangements with the counties and/or municipalities that were budgeting the host fee money. The most recent proposal, which is likely tangled up in the budget impasse, was to move away from gross terminal revenue as the measure for determining the host fee payments and to instead make it a percentage of the licensing fee, thus achieving uniformity. This marked a departure from what was argued during the court proceedings, where one party wanted to keep 2% of GTR as the municipal host fee and the other party wanted to keep the flat $10 million.
