Presque Isle Downs & On line casino in Erie, Pennsylvania, as soon as a dependable supply of jobs and neighborhood funding, is dealing with mounting monetary pressure—precipitated largely by the fast unfold of untaxed, unregulated ability video games throughout the state.
Since opening in 2007, Presque Isle was thought to be each a significant employer and an financial anchor for Erie County. However now, almost twenty years later, the on line casino’s management is warning that its long-term viability is in critical jeopardy.
Ability video games drain demand and undercut income:
The rise of so-called ability video games—slot-style terminals generally present in bars, comfort shops, and fuel stations—has siphoned clients away from conventional casinos. Presque Isle Common Supervisor Gary Hendricks says the impression has been devastating, with demand for regulated slot machines collapsing even throughout peak occasions.
“New 12 months’s Eve, busiest day of the yr for us. I nonetheless have about 500 video games that gained’t get performed, as a result of that’s how far the demand has dropped off with all these different video games in the marketplace,” Hendricks advised reporters.
What frustrates operators like Hendricks much more is that these competing gadgets usually are not taxed like conventional slot machines. Whereas Pennsylvania casinos should pay one of many highest gaming tax charges within the nation—as much as 64% when accounting for income share agreements and costs—ability video games presently function outdoors that tax framework totally.
Neighboring states, together with New York and Ohio, impose gaming tax charges between 25% and 43%, giving their casinos way more flexibility to draw gamers by means of promotions and incentives. In response to WJET/WFXP, Hendricks warned, “Let’s say, your family revenue, you bought taxed at 64%, you’re going to in all probability be making an attempt to stay a special method, proper? And that’s the place we’re.”
Presque Isle has already made troublesome choices to minimize prices. Since 2019, the on line casino has eradicated roughly 250 positions. Hendricks says the property now closes desk video games in a single day and has scaled again meals service, consolidating lunch operations right into a single, smaller café.
Nevertheless, some operations can’t be trimmed. State regulation requires 1,500 slot machines to be energetic always, and as a Class 1 facility, Presque Isle is legally obligated to take care of its horse racing operations—despite the fact that, as Hendricks famous, “There’s not some huge cash in racing.”
Regardless of repeatedly lobbying lawmakers in Harrisburg for assist over the previous three years, Hendricks says little progress has been made. “We’re going to get to a degree the place it’s the straw that’s gonna break the camel’s again,” he stated.
Lawmakers acknowledge disaster however options stall:
In response to mounting criticism, the Erie Home Delegation issued an announcement affirming its dedication to conserving Presque Isle open. “We’ve handed payments to assist Presque Isle that died within the senate – the identical senate that desires handy a sweetheart deal to the ability video games business,” the assertion learn. Lawmakers pressured that they’re pushing for ability sport regulation and taxation to degree the taking part in subject for casinos that generate public income and fund providers.
In the meantime, Governor Josh Shapiro has proposed a 42% tax on ability sport earnings in his February finances speech. A lawsuit by 12 Pennsylvania casinos can also be difficult the tax disparity in courtroom, arguing, “There isn’t any foundation for requiring licensed entities to pay about half of their slot machine income to the Commonwealth whereas permitting unlicensed entities to pay no tax on such income.”
Past the on line casino itself, native organizations and providers are bracing for potential fallout. Perry Wooden, Govt Director of the Erie County Gaming Income Authority (ECGRA), highlighted that gaming income has saved taxpayers $392 million thus far and funded very important neighborhood providers. “It offers us property tax aid by means of college districts. We noticed final yr simply $18.6 million in property tax aid,” he stated.
Jack Lee, a Summit Township supervisor, warned that the monetary pressure may ultimately be felt by residents: “Will it in the end trickle right down to the taxpayer? I imagine it should.”
The lack of funding would additionally impression establishments such because the Erie Zoo, the Erie Playhouse, and the Philharmonic, which depend on ECGRA grants to function packages and occasions.
