Posted on: December 10, 2024, 02:25h.
Last updated on: December 10, 2024, 02:44h.
When it comes to gaming taxes, no state benefits more than Pennsylvania.
Though Las Vegas and Atlantic City are regularly cited as the capitals of the US gaming industry, it’s Harrisburg that gains the most cash from legalized gambling.
Pennsylvania was the second-richest commercial gaming state last year with gross gaming revenue (GGR) of approximately $5.86 billion. But because of its high taxes, the Keystone State benefited more from gambling than Nevada did despite GGR totaling $15.52 billion in the Silver State.
According to the American Gaming Association’s (AGA) State of the States 2024 report, Pennsylvania received nearly $2.32 billion from legal gaming last year.
Pennsylvania casinos continue to stress that annual revenue and the tax benefit the gaming floors deliver Harrisburg would be even higher if the state would crack down on unregulated gaming, specifically skill gaming machines. Commonly branded Pennsylvania Skill, the terminals look and sound like traditional slot machines but differ in that the player must identify a winning payline by tapping on the corresponding symbols.
The state gaming industry claims such games are costing the highly regulated and taxed brick-and-mortar casinos hundreds of millions of dollars in lost annual slot win.
High Taxes, High Revenue
Pennsylvania’s gaming market features some of the highest tax rates in the country. The $2.32 billion benefit was the state’s highest haul ever and represented a 10.6% year-over-year gain.
The 17 brick-and-mortar casinos direct about 52% of their net win from slots to the state. In-person and mobile table games are subject to a 16% tax. Fifty-four percent of online slot revenue goes to Harrisburg.
Pennsylvania is one of only seven states with legal iGaming. It also has slot-like video gaming terminals at diesel truck stops that are subject to a 52% tax. Oddsmakers direct 36% of their online and in-person sports betting revenue to the state.
Nevada’s effective gaming tax rate is considerably less. The state takes 6.75% of all forms of gross revenue, including slots, tables, and sports bets. That’s why Nevada’s tax benefit was only $1.2 billion despite more than $15.5 billion in gross revenue.
Nevada’s low tax rate ranked the state third in government revenue. New York was second at $1.83 billion on $4.22 billion in GGR. New York is home to four upstate commercial casinos, racinos, and off-track betting locations with electronic tables and video lottery machines, and online sports betting.
New Jersey’s tax benefit in 2023 was third at $691.8 million. Along with nine casinos in Atlantic City, the state is home to iGaming and sports betting.
Pennsylvania Benefits
Pennsylvania’s gaming law directs associated tax revenue to ease property taxes for homeowners, make investments in agriculture, support the horse racing industry, and grants for economic development initiatives.
The state gaming industry employs almost 16K people, with state residents accounting for 85% of the labor force. More than a quarter of managers or higher are racial minorities and almost 40% are female.
The Pennsylvania Gaming Control Board adds that since 2006, Pennsylvania casinos have given more than $213 million to charities and responsible gaming causes.
