Pennsylvania Casinos Shutdown Causes 424 Million Tax Revenue Loss
As a consequence of its casino shutdown of more than three months, the Pennsylvania government lost about $424 million in tax revenue.
The shutdown cost Pennsylvania brick-and-mortar casino operators $968.8 million in revenue, according to research done by the Allegheny Institute. With the current structure of Pennsylvania gaming taxes, that would amount to $424.4 million in taxes.
The analysis looked at the three key revenue sources for casinos: slot machines, table games, and internet gaming. The third category, which became available last year after it was made legal by state lawmakers, was the only glimmer of light, though not nearly enough to compensate for the losses in the more traditional categories.
“Call it intuition or just plain luck that internet gaming made its debut in Pennsylvania casinos in July 2019,” the authors wrote. “While not all casinos in Pennsylvania offer online gaming options, for those that do, total internet gaming revenue (including online table games, internet slot machines and online poker) jumped from $13.9 million in January 2020 to $50 million in June, an increase of 258.6 percent.”
They noted a slight decline in internet gaming revenue from May to June this year after casinos began to reopen, but it remained well above the pre-pandemic numbers.
“[A]lthough online gaming revenue from slots, table games, and poker rose to record-setting highs, the total intake from January through June ($206.6 million) doesn’t even cover a quarter of the estimated losses from slot and table games.”
For slot machines, a significant source of tax proceeds, the numbers were looking more grim. From the time they closed in mid-March to the beginning of reopenings in June, casinos missed out on a period when they’d typically see some of their biggest income numbers. March, in particular, has been a peak month for Pennsylvania casinos, according to the study.
It was estimated that casinos missed out on $143.5 million in revenue in March and another $415 million over the course of April and May. Even with the reopenings in June, there was another $140.3 million in lost revenue. Ultimately, the total losses come in at $699 million, with $381.1 million of that representing lost tax proceeds.
