Pa. Supreme Court Strikes Down Part of State Gambling Laws

By | 2019-04-30T08:09:56+00:00 Apr 30, 2019|Legislation|
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In October 2017, the state of Pennsylvania signed into a law a set of gambling expansion laws that have since played a monumental role in the growth of the state’s gaming industry. Some of the things that Pennsylvanians are now able to enjoy include sports betting and online casino gaming which is expected to make its debut in the next couple of months. At its core, the gambling expansion bill seemed to hold the welfare of various stakeholders very highly, or so we thought.

As it turns out, after reading the fine print of the Keystone State’s gambling expansion bill, it was discovered that some of the language in the law seemingly portrayed lack of equity across the gambling industry and a number of casino operators are not amused by this. To that effect, the operators filed a lawsuit which found its way to the state’s highest courts.

What the Fuss Is All About

Well, the gambling expansion bill that was signed into law back in 2017 includes a provision that requires all casinos to contribute 0.5 percent of their total slot machine revenue to Casino Marketing and Capital Development Account. Upon a deeper and more comprehensive look at this particular clause, it was found that what it was doing was, in essence, taking from the rich operators and giving to the poor ones. This is because the money in the Casino Marketing and Capital Development Account was distributed to the state’s weakest casinos where the funds would then be used for marketing and property improvement expenses.

Sands Bethlehem is the operator that uncovered this issue and opted to sue the Keystone State ins a bid to have the law struck down. The operator’s argument was that what the law was doing was somewhat unfair since it was more like having the profits of better-performing casinos shaved off and redistributed to the casinos that were not performing as well.

A Violation of State and Federal Laws

The Keystone State’s Supreme Court has ruled in favor of Sands Bethlehem, asserting the fact that the move outrightly violated state and federal laws. In the words of Supreme Court Justice Thomas Saylor, “Act 42 establishes a system specifically designed so that the taxpayers who pay the least into the CMCD 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”.

This means that the portion of the legislation that is being opposed by the state’s casino operators is illegal and, therefore, Pennsylvania will have to reimburse all of the casinos that had contributed to the fund – there is a total of $21 million that will need to be refunded. In conclusion, the state will also no longer be collecting the funds.

By | 2019-04-30T08:09:56+00:00 Apr 30, 2019|Legislation|

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Adam Mason
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