Lawmakers Urge Approval of Small Games of Chance in Taverns
HARRISBURG, SEPT. 21, 2010 — Senate and House lawmakers from both parties joined tavern owners, private club operators and emergency responders today to urge passage of legislation that would allow small games of chance in taverns.
House Bill 2379 and its companion Senate Bill 1301 would expand the Local Small Games of Chance Act to include licensed establishments like local bars and taverns and private clubs.
Pennsylvania faces several fiscal challenges in the weeks and years ahead, prompting a sense of urgency to bring these measures before the full Senate and House for debate, said state Sen. Mike Stack (D-Philadelphia). The 2010-11 budget assumed that the state would receive $850 million in federal Medicaid funding from Congress. However, the state received less than anticipated, which leaves the new budget with a $280 million hole.
In addition, the expiration of the federal American Recovery and Reinvestment Act stimulus funds will create a $2.3 billion gap in funding next year. Plus, other structural funding problems have led some to predict that the structural deficit will be as much as $5 billion next year.
“We don’t know if the Marcellus Shale tax will be approved and we’ve already made numerous painful cuts to the budget. We can’t just cut and slash our way to fiscal solvency. We need to find a new source of revenue,” Stack said. “Legalizing small games of chance in taverns and private clubs is a common-sense way to generate millions of dollars for the state without burdening taxpayers.”
According to the legislation, 30 percent of the tax revenues would go directly back to Pennsylvania and 20 percent of revenues would go to charitable organizations that are designated in the business’ license application. The remaining 50 percent would go back to the tavern owners and private clubs.
“At a time when small businesses everywhere are struggling, this is a new opportunity for bars and taverns to bring in customers and preserve jobs,” said Sen. Ted Erickson (R-Delaware/Chester), the author of Senate Bill 1301. “This is a significant way to help them bring in revenue and business while giving them more opportunities to help local charities.”
“We all know that charities suffer in tough economic times,” said Rep. Eugene DePasquale (D-York), author of House Bill 2379. “By allowing taverns to operate small games of chance, we are not only helping businesses but also charitable organizations, from the local Little League team to nationally recognized organizations.”
Amy Christie, executive director of the Pennsylvania Tavern Association, emphasized that the revenue collected by the state and charities would only be paid by the retail licensees and that private club organizations would not be taxed on their proceeds from small games of chance.
“In addition, this legislation would protect the 200,000 Commonwealth jobs that taverns and restaurants provide every year,” Christie said.
An amendment has been proposed to give an additional 1 percent to the Pennsylvania State Police to enforce the measure and another 1 percent to the Pennsylvania Department of Revenue for administrative costs. The tavern owners would keep the remaining 48 percent of the revenues they raise.
That funding to the Department of Revenue would cover the costs of monitoring and accounting for the revenue generated from the small games. Machines would be installed at participating taverns, which would scan the game tickets so that the state has a record of the tickets sold. The distributors of the small games of chance would be required to report the tickets they are supplying and the revenue collected, while the taverns would be responsible for submitting the money to the Department of Revenue.
“It’s important that we give the state the resources it needs to ensure that these small games of chance are operating properly,” said state Rep. Ron Miller (R-York), co-sponsor of House Bill 2379. “These are good measures that my colleagues have offered, so we want to make sure that they are run lawfully in taverns.”
Former Chief John Senft of the Department of Rescue Services of York said fire companies would tremendously benefit from small games of chance.
“With the state of Pennsylvania’s economy and the decline in funding for our efforts, these bills are a necessity,” Senft said. “Not only would we be able to gain more donations from small games to repair needed equipment, our local businesses would be able to increase their donations to fire departments in Pennsylvania. Include the added revenue that these small tax-paying businesses would be generating for the state by way of fees they would be required to pay, this legislation is a no-brainer.”
Sen. Mike Stack: Elizabeth Rementer firstname.lastname@example.org 717-787-5166
Sen. Ted Erickson: Tom Golden email@example.com 717-787-1350
Rep. Eugene DePasquale: Sara Bozich firstname.lastname@example.org 717-787-7895
Rep. Ron Miller: Dan Massing email@example.com 717-772-9845