Erie PA - Erie Regional Chamber and Growth Partnership

Legislative Parameters for Gaming Revenue Distribution in Erie County, PA

PA LEGISLATIVE LANGUAGE AND EXAMPLES
Prepared by the Growth Partnership Division
2/14/07

The PA Race Horse Development and Gaming Act, PA Act 71 of 2004 (as amended by PA Act 135 of 2006)

This law provides for establishment of a State Gaming Fund and net slot machine revenue distribution.

  • Each slot machine licensee (including Presque Isle Downs) pays a daily tax (34%) and local share assessment (4%) of its daily gross terminal revenue from the slot machines into the state fund.
  • The Commonwealth makes quarterly distributions among the counties and municipalities hosting a licensed facility in accordance with guidelines established in the law.
    • Parameters for distribution include what “category” the licensed facility is, whether it is located at a harness racetrack or thoroughbred racetrack, and what class of county and type of municipality host the facility.
    • Presque Isle Downs is a Category 1 licensed facility that is located at a thoroughbred racetrack. Erie County is a Third Class County, and Summit Township is a Second Class Township.
  • For Third Class Counties: 1% of the gross terminal revenue is to go directly to the county for undesignated purposes, and 1% of the gross terminal revenue is to go to the county for the purpose of “municipal grants” within the county.
    • Municipal grants are to be administered by the county through its economic development or redevelopment authority. Grants may be made to the municipality in which the licensed facility is located (Summit Township), the county in which the facility is located (Erie County), and to municipalities which are contiguous to the municipality in which the licensed facility is located (McKean Township, Millcreek Township, Greene Township and Waterford Township.) Grants are to be used for human services, infrastructure improvements, facilities, emergency services, health and public safety expenses associated with licensed facility operations. If at the end of a fiscal year uncommitted funds exist, the county is to pay to the economic development or redevelopment authority the uncommitted funds.
    • There is no process prescribed in the law for Third Class County distribution of undesignated revenues.
  • For Second Class Townships hosting a Category 1 licensed facility: 2% of the gross terminal revenue or $10,000,000 annually, whichever is greater, is to go to the host municipality (Summit Township) EXCEPT that the amount allocated to the municipality cannot exceed 50% of its total budget for fiscal year 2003-2004 (adjusted for inflation). Any remaining money over and above the 50% is to be paid to the County to be distributed in the same manner as prescribed for Third Class Counties (see above bullet point). This implies that ½ of the money is undesignated, and ½ of the money is restricted to “municipal grants”. There is no process defined in the law for distribution of the revenues by the Second Class Township.

Projected Revenues – Erie County and Summit Township

  • The PA Gaming Control Board estimates Gross Terminal Revenue for Presque Isle Downs at $132,714,000 for a “stabilized year” – meaning after the facility has time to refine its operations. Much discussion locally has projected $100,000,000 in gross terminal revenues for the initial year.
  • Based on parameters under the law, the following are revenue projections for Erie County and Summit Township, based on the $100,000,000 figure:
    • $1,000,000 to Erie County for unrestricted use
    • $1,000,000 to Erie County for “municipal grants”
    • $1,146,553 to Summit Township (based on 2003-2004 budget restrictions, with the Summit Township budget number of $2,293,107 being used for discussion purposes)
    • $8,853,447 to Erie County; ½ unrestricted and ½ for municipal grants
      • $4,426,723.50 unrestricted
      • $4,426,723.50 for municipal grants

Philadelphia Park (Bucks County) and Penn National (Dauphin County):

Philadelphia Park is a Category 1 licensed thoroughbred facility located in Bensalem, a Second Class Township in Bucks County, a Second Class A County. Penn National is a Category 1 licensed thoroughbred facility located in two Second Class Townships in Dauphin County, a Third Class County. East Hanover Township is considered the host municipality for Penn National.

According to Bucks County government officials, the County, as of this writing, did not have a formal structure or process in place for distribution of gaming revenues, nor did it have a clear understanding of how much money will be coming to the County from the gaming revenue fund. Additionally, there had been very little discussion within the County regarding funding priorities.

As of this writing, Dauphin County was in the process of establishing an “advisory committee” required under the law as their licensed facility is located in more than one Second Class Township. The purpose of the advisory committee is to “advis[e] the county as to the need for municipal grants for health, safety, transportation and other projects in the public interest.” The committee is to be comprised of two individuals from the host municipality, two from contiguous municipalities within the county of the third class and one from the host county. Dauphin County requested the general public to submit resumes in order to serve on the advisory committee, and they were in the process of receiving those resumes.

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