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Pennsylvania gaming tax revenue drops in March; NJ also down

Pennsylvania gaming tax revenue suffered in March due to Covid-19, as did New Jersey.

The Keystone state saw its tax revenue drop by 50%, compared to February. Meanwhile, New Jersey-based casinos also paid less to the local government due to their lower earnings. 

Neighboring Delaware has yet to release its March results, but signs suggest that it will also endure both tax and operator revenue losses.

Pennsylvania hit hard 

Pennsylvania gaming tax revenue from gambling in March totaled $62 million, compared to $124 million in February. 

Operators themselves made $154 million last month, which was meagre in comparison to the $304 million they had pocketed in February. 

Part of the reason behind this decline is due to gambling tax rates in the state. Slots are taxed at 54%, while 16% of operators’ revenue from table games must be paid to the government. 

In comparison, New Jersey taxes operators 8% for both of these game types. 

Despite a 24% month-on-month increase in online casino revenue, which stood at $24.3 million, the state made just $2 million from this. 

Pennsylvania Gaming Control Board (PGCB) spokesman Doug Harbach shared his thoughts on the current situation, which were as follows. 

“We certainly have seen an uptick in online play, in particular table games, the biggest being poker.

“It does not make up for the casino losses. It will not come close to satisfying the tax revenue we’ve been used to.”

The state could feel a knock-on effect away from just casinos’ revenue 

While gaming tax has contributed 0.5% to overall revenues this fiscal year, issues could be experienced on a more granular level.

For example, Parx Casino in Bensalem contributes $11 million – which is almost a quarter of the town’s annual revenues – each year. This is a fixed host fee, paid in four instalments each year.

Joseph DiGirolamo is the township’s mayor. He said that since operators’ doors were open for all but a few weeks in Q1 2020, he expects to receive the first payment to come through without issues. 

After that, however, he’s worried about the impact of both limited operations and possible rises in unemployment. 

He discussed his concerns about what could happen in Q2 2020 and perhaps beyond too. 

“After that [the payment], I’m worried. It [the fixed host fee]’s a big part of our budget. 

“People aren’t earning income, so that’s another big part of our budget.”

New Jersey also feels the strain 

All of New Jersey’s nine casinos are based in Atlantic City and due to the current situation, all are temporarily closed. The Garden State’s monthly revenue dropped was $8 million less than February’s figure. 

In terms of year-on-year revenue, operatore earned 44% less than in March 2019. When talking about monthly figures, operators also generated $124 million less than had been the case in February. That was despite an online month-on-month rise of 65.6%.

Altogether, Pennsylvanian and New Jersey casinos have lost $274 million in a single month. 

Delaware yet to release March figures 

Nearby Delaware, which also permits both on and offline gaming, has not yet released its gaming figures for March. The state is home to three casinos. 

According to early reports, pre-tax revenue from online gambling went up by 58% last month. However, it wasn’t enough to make up for a 16% drop from casino table games – which themselves are subject to a 15.5% tax rate.

Casino table game revenue stood at $3.4 million on March 29th, compared to $4.1 million in February. 

Delaware Lottery Director Vernon Kirk said the following. 

“iGaming is a very, very small portion.

“It’s up considerably, but those are percentages. Our dollars are not anything to write home about.”

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