The Supreme Court in Pennsylvania ruled that certain casinos are eligible to have millions of dollars returned to them, after they were forced to pay a disproportionate amount of tax that only benefited their competitors.
In a case brought against the state by two of the best-performing casinos in Pennsylvania, the Parx Casino and Sands Bethlehem, the high court agreed that these casinos should not have had to pay into a special fund that helped lesser-performing casinos such as Presque Isle Downs and Casino and Mount Airy Casino Resort.
In 2017, when Pennsylvania expanded its gambling industry, it created a program called Act 42, which required that all casinos pay 0.5% of their slot machine revenue into a special fund. The program was to last for a decade, or until all casinos managed to exceed their slot revenue targets.
At the end of the program, the funds were meant to be redistributed among casinos. The casinos who performed the worst would receive the most funds.
The Sands Bethlehem and the Parx Casino immediately argued that Act 42 violated state and federal constitutions and applied for the progam to be frozen – which it was pending the Supreme Court ruling.
This week, the judge in the case, Thomas Saylor said: “Act 42 establishes a system specifically designed so that the taxpayers who pay the least into the … Account are the most likely to receive a mandatory distribution from that account (and the less they pay, the more they receive), and vice versa.”
“Any advantage that a high-earning casino which does not qualify for an automatic distribution might receive from the gaming industry being ‘up and running’ throughout Pennsylvania is too speculative to be considered a benefit proportional to the amount of money it must pay into the (Act 42) account,” he added.
There is currently over $21 million in the fund and it is assumed that the top performing casinos in Pennsylvania will receive the bulk of the money.
