Some Pa. casinos pledge to pay host fee, but not Sands Bethlehem
Four casinos have committed to giving their communities the host fees that have been deemed unconstitutional. Sands is not among them.(FRANK WARNER/THE MORNING CALL)
By Matt Assad
Even though the state Supreme Court has struck down the $10 million casino host fee as unconstitutional, casinos across the state have begun to cut deals to make sure their host communities still get the money they've been using to fund police, fire and even homeless shelters.
Sands Casino in Bethlehem will not be among them — at least not anytime soon.
Parx Casino in Bensalem last week became the fourth gambling hall to agree to give its host communities their casino money next year, even if state legislators can't follow through on their promise to restore the fee before the money is cut off in January.
Hollywood in Dauphin County, Harrah's in Chester and Rivers in Pittsburgh had already struck deals, while others are expected to follow in the coming weeks. But Sands officials who met with Bethlehem Mayor Robert Donchez last week told him they're going to take their cue from state legislators, who tried and failed to tackle the host fee issue before they went on break in November.
That wait-and-see approach leaves the city rolling the dice on when, or if, it will get money equivalent to the pay for 100 police officers.
"We're not going to speculate on any future outcome by the Legislature," said Ron Reese, spokesman for Las Vegas Sands Corp., which owns the Bethlehem gambling hall. "As it unfolds, we'll follow and act accordingly."
Donchez said he's not worried — yet.
"We met with the Sands and we're all hopeful legislators will find a fix," Donchez said. "If nothing happens by April, we'll talk [with Sands] again and take it from there."
All this talking, waiting and hoping is happening in the wake of a September state Supreme Court ruling that struck down the $10 million host fee and the 2 percent tax on slot machines revenues funneled to counties. Justices agreed that the tax put a much greater burden on smaller casinos such as Mount Airy Casino Resort than big-revenue casinos such as Sands Casino Resort Bethlehem.
Mount Airy, in Monroe County, challenged the $10 million fee, arguing successfully that it violates the tax uniformity clause in the state constitution.
Justices stayed their opinion for 120 days, until Jan. 26, to give legislators a chance to fix the law before the flow of money stops. But frantic attempts by House and Senate leaders to do that before the session ended in November failed. That's left communities that balance budgets with the the collective $140 million in host fees statewide relying on legislators to come together when they return to Harrisburg next month.
However, some casinos have decided to remove all doubt. Hollywood Casino, in Grantville near Harrisburg, was the first, striking a deal in November to pay the host fee through June, even if legislators fail to restore it.
"If they don't get a fix by June, we'll extend through December and keep extending it until the matter is settled," said Eric Schippers, a senior vice president with Hollywood Casino owner Penn National Gaming. "They're counting on that revenue for critical needs and we don't want them worrying about whether it's going to be there. It's going to be there. That's our commitment."
Rivers followed a few weeks later.
"To reinforce Rivers Casino's strong commitment to our hometown, we have worked collaboratively with city officials to ensure that $10 million in annual local share payments from Rivers Casino to Pittsburgh will continue uninterrupted through 2017," said Rivers General Manager Craig Clark.
As for the remaining six casinos — smaller resort casinos in Valley Forge and Lady Luck Casino in Fayette County were not affected by the ruling — the payment schedule gives host communities a little breathing room. Casinos make their host fee payments quarterly, and they'll make their Jan. 15 payment before the money stops.
Legislators will be back in session by mid-January. That gives them time to fix the law before casinos would miss their next scheduled payment April 15. The problem is that law changes often don't get passed until legislators are deep inside their annual June horse-trading session to pass the state budget.
Sen. Pat Browne, R-Lehigh, said he's hoping to beat the April deadline.
"With so many moving parts, there are no guarantees," Browne said. "But we'll be working as quickly as possible toward a fix. We know how important this money is."
Casinos that have agreed to pay host fees through 2017
•Hollywood Casino, Grantville
•Rivers Casino, Pittsburgh
•Harrah's Casino, Delaware County
•Parx Casino, Bucks County