Lawmakers, slots owners parry over revenues

HARRISBURG - Pennsylvania's gambling regulators said they will forge ahead with plans to tap the new gush of slot-machine revenues to pay their bills, even as casino owners worked to limit how much it will cost them.

The question of how much money the casinos will pay in regulatory costs has created a dilemma for policymakers, just two weeks ahead of the Feb. 9 date when the Pennsylvania Gaming Control Board projects that its accounts will run dry.

"Our only other alternative would be to close the agency," gaming board chairman Tad Decker wrote in a Monday letter to casino owners.

Top officials at Philadelphia Park and Mohegan Sun at Pocono Downs said yesterday that they were still trying to persuade policymakers to head off what they worry will be an ill-conceived regulatory funding plan that punishes the casinos that open earliest. Legislators have gotten involved, and the funding will be the subject of a Senate Community, Economic & Recreational Development Committee hearing next week.

The committee chairwoman, Sen. Jane Earll (R., Erie), said last week that legislators are trying to negotiate a compromise before the assessment is enforced. Otherwise, they could go back and deal with the matter in legislation if they don't like how the state assesses slots revenues, she said. "If we didn't agree with it, we would have the authority to fix it," said Earll, whose district is home to Presque Isle Downs, the planned racetrack and slots parlor. "But we don't want to get involved that battle."

Current law gives the Revenue Department the authority to use slots revenues to fund gambling regulatory activities by the department, the gaming board, state police and the Attorney General's Office.

However, an earlier plan by the gaming board to begin collecting 5 percent of slot-machine revenues was greeted by an outcry from casino owners and some influential lawmakers.

To try to mollify them, the gaming board pledged to cut the cost of regulation by 10 percent, asked the casino owners for feedback, and promised to eventually balance the amounts paid by each casino owner, regardless of when each opens its doors. Under the options offered by the Revenue Department and gaming board, casinos would pay at most 4.3 percent of their slots revenues or an equal share of the cost.