Published on: December 10, 2024, at 02:25h.
Last updated on: December 10, 2024, at 02:44h.
When discussing gaming taxes, Pennsylvania stands out as the primary beneficiary.
While Las Vegas and Atlantic City are often recognized as major players in the US gaming industry, Harrisburg emerges as the top earner from legalized gambling.
Pennsylvania ranked as the second wealthiest commercial gaming state in the previous year with a gross gaming revenue (GGR) of around $5.86 billion. Despite Nevada’s GGR totaling $15.52 billion, due to its high taxes, Pennsylvania reaped more benefits from gambling compared to Nevada.
The American Gaming Association’s (AGA) State of the States 2024 report reveals that Pennsylvania received close to $2.32 billion from legal gaming in the previous year.
Pennsylvania’s casinos continue to emphasize that annual revenue and the tax benefits provided to Harrisburg through gaming floors would be even higher if the state took action against unregulated gaming, specifically skill gaming machines known as Pennsylvania Skill. These terminals resemble traditional slot machines but require players to identify a winning payline by tapping on corresponding symbols.
The state’s gaming industry asserts that such games are causing significant financial losses amounting to hundreds of millions of dollars in annual slot wins for the highly regulated and taxed brick-and-mortar casinos.
High Taxes, High Revenue
Pennsylvania’s gaming market features some of the highest tax rates in the country. The $2.32 billion benefit marked the state’s highest revenue ever and represented a 10.6% increase year-over-year.
Approximately 52% of net slot win from the 17 brick-and-mortar casinos is directed to the state. In-person and mobile table games are subject to a 16% tax, while 54% of online slot revenue goes to Harrisburg.
Pennsylvania is one of seven states with legal iGaming. It also has slot-like video gaming terminals at diesel truck stops that are subject to a 52% tax. Thirty-six percent of online and in-person sports betting revenue is directed to the state.
Nevada’s effective gaming tax rate is considerably lower. The state levies a 6.75% tax on all forms of gross revenue, including slots, tables, and sports bets. Consequently, despite gross revenue exceeding $15.5 billion, Nevada’s tax revenue was only $1.2 billion.
Nevada’s lower tax rate positioned the state third in government revenue. New York ranked second with $1.83 billion from $4.22 billion in GGR. New York houses four upstate commercial casinos, racinos, off-track betting locations with electronic tables and video lottery machines, and online sports betting.
In 2023, New Jersey’s tax revenue reached $691.8 million. Along with nine casinos in Atlantic City, the state offers iGaming and sports betting.
Pennsylvania Benefits
Pennsylvania’s gaming legislation allocates tax revenue to alleviate property taxes for homeowners, invest in agriculture, support the horse racing industry, and provide grants for economic development initiatives.
The state’s gaming sector employs nearly 16,000 individuals, with state residents constituting 85% of the workforce. Over a quarter of managers or higher are racial minorities, and nearly 40% are female.
The Pennsylvania Gaming Control Board reports that since 2006, casinos in Pennsylvania have contributed over $213 million to charitable organizations and responsible gaming initiatives.