Impact of Law on Running a casino business in Philadelphia

Much research and empirical evidence suggests that the implementation of legalized gambling, in the form of casinos, has a negative impact on the respective statewide lottery system. Many states currently earmark revenue from lottery sales toward education and other such outlets. After winnings and administrative costs are paid out, Pennsylvania remains the only state that earmarks the remaining revenue toward its senior citizens. The PA state lottery contributes 31 cents of every dollar of gross revenue to senior citizen programs. The benefit breakdown for fiscal year 2003-2004 saw $126.6 million in property tax relief and rent rebates. Low-cost prescription drug programs (PACE) saw $370 million and $116.447 million went towards free and reduced public transportation. Lastly, $211.89 million helped fund the Department of Aging to serve and deliver meals to the elderly. Currently, those residents 65 years of age or older qualify for property tax and rent rebate relief and PACE. Any resident 60 years of age or older qualifies for free/reduced public transportation and the hot meals program. In 2007 the limit on income for homeowners interested in receiving a rebate rises dramatically from $15,000 to $35,000. The number of seniors that qualify for rebates will increase due to the higher limit on annual income. Also, a new law takes effect changing the maximum rebate from $500 to $650. Therefore, there is an increase in the amount of funds going to senior citizens in 2007.

In July of 2004, casinos were legalized in the state of Pennsylvania. Fourteen locations will open slots parlors in the state holding up to 3,000 slot machines for the first year. These fourteen locations are distributed throughout the state hoping to draw more than just the in-state population. Since casinos are currently legal in West Virginia, it is assumed that revenues will no longer be lost to the neighbor state once casinos are fully functional in Pennsylvania. The state of Ohio included a referendum on the most recent mid-term election asking residents their opinion on legalized gambling. In a 2 to 1 vote, the residents denied the state the ability to provide 31,500 slots with revenues earmarked toward Ohio high school education programs. Finally, New Jersey has legalized gambling including slots and table games primarily located in Atlantic City.

Once all fourteen locations are operational it is estimated that Pennsylvania will have $1 billion in increased proceeds from the institution of gambling. The proceeds are yet to be earmarked but the state legislature has plans of including a percentage of them to compensate senior citizens with increased property tax relief. Total gaming revenue is difficult to estimate because the Pennsylvania Gaming Control Board (PGCB) has yet to grant the remaining slots licenses.

Since property tax relief is supposed to receive approximately 32% ($1 billion) of the casino gross revenues, it can be reasonably assumed that the state believes it will have more than $3 billion in annual gross casino revenue. As the implementation of legalized gambling is introduced ...