PA Casinos to Pay Host Fees Despite Court Ruling

This past September, the PA Supreme Court decided that it was unconstitutional for a community to charge $10 million host fees. In essence, this $10 million was a payment made by the casino to the community in which it was situated. Even though this ruling was made, most of the casinos across the Pennsylvania have still pledged to provide money to their host communities; all except for one.

Sands Casino, located in Bethlehem, PA, is the only casino to come forward and say that they will not be paying any host fees, at least not at any point in the near future.

Sands Casino Resort Bethlehem; Las Vegas Sands Corp.

New Deal in the Works

State lawmakers are still working to see if there is a Constitutional route by which casinos can be, in essence, forced to provide funds to local communities. The ruling in September was put on a stay until the end of January, at which point the required payments will no longer actually be a requirement. At the time, lawmakers thought that the 120 day stay would offer enough time for a new law to be written and approved, but that time has come and gone without any resolution. Though there will be time before the January 26th deadline, there is little hope that a final deal will be drawn up and approved.

Despite the fact that September’s ruling would mean that casino contributions to local communities would be cut off come shortly after the turn of the New Year, many casinos have already promised to keep the funds rolling in as usual. Hollywood Casino (near Harrisburg), Harrah’s Chester, Rivers in Pittsburgh, Mohegan Sun (Luzerne County), and Parx (Bethlehem) have all said that they will continue to pay even if state legislators cannot draft a deal before the end of the year—something that does not look very likely at all at this point because lawmakers have been on break since November.

Sands Bethlehem is the sole casino in the state that has not pledged to continue paying past the New Year. Last week, casino officials met with the Mayor of Bethlehem and basically told him that they are going to wait and see what state legislators determine to be the right course of action going forward. In essence, once the payments are stopped in January, Sands will not join other casinos and will halt their payments.

Hollywood Casino was the first of Pennsylvania’s casinos to announce that they would continue making payments regardless of whether lawmakers can strike a deal or not. Eric Schippers, Senior VP of Hollywood Casino, was quoted as saying that, “If they don’t get a fix by June, we’ll extend through December and keep extending it until the matter is settled. They’re counting on that revenue for critical needs and we don’t want them worrying about whether it’s going to be there. It’s going to be there. That’s our commitment.” After Hollywood, Rivers Casino in Pittsburgh followed up by making more or less the same commitment.

Some Casinos Not Worried About Ruling Quite Yet

Smaller casinos, such as those that exist in Valley Forge and Fayette County, are not as concerned about the ruling and subsequent lack of agreement because their payments are structured differently. These casinos are set to make a payment in mid-January and then were not to make another until the Spring. This means that this issue is not going to really impact them unless a resolution cannot be reached before the end of the Winter. Despite this elongated timeframe between payments, there is still a somewhat high likelihood that state lawmakers will not draft and pass any casino payment legislation until the Summer, at the earliest.

This will be an interesting story to keep our eyes on, because it will not only affect Pennsylvania casinos going forward, it also stands a high likelihood of setting a precedent of sorts; a precedent that other states with similar community contributions might choose to pursue. Right now, however, there are many more questions than answers and we are left to do nothing but wait until state lawmakers get back to work.