Is Sands Bethlehem In The Wrong For Refusing To Ensure Local Host Payment?

One Pennsylvania Casino Is Refuting Claims That It’s A “Bad Corporate Citizen” For Withholding Host Fee

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When the Pennsylvania Supreme Court ruled the current host fee unconstitutional in late-September it put the legislature under the gun, but lawmakers still had ample time to act and avoid what is now turning into a very messy situation.

In fact, the legislature did figure out a way to solve the problem, it just didn’t pass it.

And now, one Pennsylvania casino is firing back against lawmakers for suggesting that it’s not fulfilling its duty, when the reality is, there is no law to follow.

Back story on the Pennsylvania Supreme Court ruling can be found here.

When kicking the can down the road goes wrong

In late October, the Pennsylvania Senate created a temporary fix that would have reinstated the local host fee. The bill was then sent the bill over to the House of Representatives.

The House passed an amended version of the bill that made the fix permanent and added in several other gaming reforms, most notably online gambling and daily fantasy sports legalization.

This shouldn’t have been a problem, considering the Senate had effectively agreed to pass these measures earlier in the session, when revenue from gaming reform was earmarked as a funding mechanism for the state’s budget.

And then a funny thing happened. The Senate did nothing, and the messy situation the state was hoping to avoid is now rearing its head.

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Handshake agreements reached to keep money flowing

Five of the affected casinos have reached agreements with their host communities to keep the money flowing.

These local communities and counties count on the percentage of the $10 million paid by the casinos they receive to fund essential programs and services.

But one high-profile casino has rebuffed the idea of entering into this type of handshake agreement.

Sands Bethlehem.

Pay up or else…

Sands’ refusal to ensure its payment of local host fees, even if the legislative deadline comes and goes without a solution, has rankled key officials in Northampton County.

Among the critics are District Attorney John Morganelli, who sent a hostile letter to Sands President Mark Juliano.

According to the Morning Call, Morganelli wrote in part, if Sands doesn’t reach an agreement to keep local host fee money flowing, “I would not in good conscience be able to justify the use of my limited resources to help a profitable billion-dollar corporation while the Sands maintains the position they are an island unto themselves.”

Morganelli is overtly saying that if Sands doesn’t agree to continue making payments, his office will stop prosecuting certain crimes committed against Sands Bethlehem Casino.

These are cases the DA’s office has a right to refuse to prosecute because they could be handled in criminal or civil court.

Sands’ rebuttal

In response to Morganelli’s scathing letter, Sands spokesman Ron Reese invited critics to look at the casino’s track record, which includes $1 billion in investment in Bethlehem and $1.5 billion in state and local taxes paid over its existence.

“In no way has this company moved off of its commitment to being a good corporate citizen, and anyone suggesting otherwise is being disingenuous,” Reese told the Morning Call.

“We opened a casino and hotel in the middle of the Great Recession, created more than 2,500 jobs and have been very active in the community. We remain committed to having the best resort casino on the East Coast, and we’re disappointed in any view that suggests otherwise.”


Sands has a point.

Sands didn’t create the current situation, nor is the casino refusing to meet its obligations.

Lawmakers could have solved this problem last year, but instead chose to kick the can down the road, and they must now live with the consequences.

The Senate’s inaction has created a period of uncertainty for the city of Bethlehem, the county of Northhampton, and beyond.

Sands is an easy target to blame, but the real blame lies at the feet of the Pennsylvania Senate who could have solved this problem before it became a problem.

It simply chose not to.

Image Credit: Andy Borysowski /

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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