To fill the revenue hole that the absence of VGTs creates, lawmakers are considering a more focused form of expansion: So-called “satellite” casinos.
While no official proposals have been released, satellite casinos would likely be:
Per PennLive, the current plan is to authorize up to 10 satellites, with license fees running from $7.5mm to $10mm.
One risk of introducing a new concept at this stage in the game: It may prove difficult to craft an approach that gets a sufficient amount of casino stakeholders on board.
A key issue will revolve around location – identifying locations that are both viable but also not a threat to existing operators.
Lawmakers have apparently floated the idea of a 25 mile buffer zone, a concept that was immediately rejected by Penn National.
“Given the size of the expansion under consideration and the fact that more than 50 percent of our customers come from beyond a 25-mile radius, this could have a devastating impact on our business,” Eric Schippers, senior vice president for public affairs, told PennLive.
Sources close to the situation cautioned that nearly everything remains in flux.
But the emerging consensus around the issue of tax rates for online appears to be in the range of 24 percent to 26 percent for slots, and 16 percent to 20 percent for table games and poker.
Rates in those ranges would provide the industry with a challenging, but not insurmountable, hurdle to profitability.
Where we still haven’t heard firm word is on two other key issues that are understood to be in play:
Deadlines in Pennsylvania are generally treated more figuratively than literally by lawmakers.
With that caveat in place, lawmakers are (at least in concept) facing a Monday deadline to deliver a revenue package to pay for a recently-passed budget.
Per the Associated Press, lawmakers will be heading to work Sunday for public sessions and private negotiations.
Without a published bill, it’s impossible to say for sure. But other elements currently included in the expansion package are understood to be: