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Casino Shutdown Costs Pennsylvania $424 Million In Tax Revenue

Pennsylvania Collects More In Tax Revenue From Casinos Than Any Other State

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Thanks to its casino shutdown of more than three months, the Pennsylvania government lost about $424 million in tax revenue.

According to research done by the Allegheny Institute, the shutdown cost Pennsylvania brick-and-mortar casino operators $968.8 million in revenue. With the current structure of Pennsylvania gaming taxes, that would equate to $424.4 million in taxes.

According to a Pittsburgh Post-Gazette report, the study estimated casinos would have earned $143.5 million during the second half of March, $415 million in April and May and another $140.3 million in June, just in slot machine revenue.

Slot machine revenue is taxed at a higher rate than typical table games with the state taking 52 percent of the gross revenue. Table games are taxed at a 16 percent clip. No other state collects as much tax revenue from the gambling industry as the Keystone State.

During the 2018-2019 fiscal year, the state collected more than $1.2 billion from slot machine revenue alone.

The study cited that online casinos helped alleviate some of those losses during the closure, but online numbers couldn’t come close to even putting a dent in what the state missed out on from the brick-and-mortar shutdown.

“Although online gaming revenue from slots, table games and poker rose to record setting highs, the total intake from January through June ($206.6 million) doesn’t even cover a quarter of the estimated losses from slot and table games,” the report read.

The study also looked into the costs of casino workers being laid off or furloughed. According to numbers from the Bureau of Labor Statistics, 70 percent of the amusement and entertainment industry was out of work. These workers were likely collecting unemployment benefits, which puts a further strain on the state’s decline in tax revenue.

During the 2018-2019 fiscal year, there were 16,717 people employed by the state’s 12 casinos. Of those workers, only “a few managers and maintenance crews” stayed employed through the closure.