Pennsylvania Casinos Provide Solid Tax Payments in 2020

In 2020, the COVID-19 pandemic hit the United States gaming industry hard. Commercial casinos were shut down for weeks if not months and were unable to contribute to tax payments as they normally would in each state. For the most part, lawmakers in states where gambling is legal had to come up with unique ways to meet budget shortfalls due to the lack of payments. However, there was one state that fared pretty well considering the circumstances. In Pennsylvania, the casinos were not as impacted as other states were by the pandemic.

According to the recent State of the States address by the American Gaming Association (AGA), the state saw a drop in revenue of 21%. In total, casinos in the US lost $30 billion and revenues were down over 31% when compared to 2019.

Sticking it Out

In the northeast portion of the US, there are several states offering retail casino gaming. The market is quite competitive here and of course, this is where Pennsylvania is located. While the state saw a drop in casino revenues of 21% other states nearby were hit much harder. Take New York for example.

The state was shut down longer than others due to the high number of COVID-19 cases. For 2020, the state saw a more than 56% decrease in revenues. This was a huge loss and has led lawmakers to consider allowing new casinos to open sooner than originally planned just to bring in new revenues.

West Virginia and Maryland also took a hit, both coming in at just over 30% lower than 2019 earnings. New Jersey had a lower percentage, dropping only 16.9%. The numbers generated by the AGA report do not include hotel stays, conventions, and other details, so the loss would have been greater in each state.

For Pennsylvania, slot gaming earnings were down in casinos, dropping by over 42%. Only $1.36 billion was generated from land-based casinos. Table games were down as well, dropping over 44% with only $504.3 million earned.

The state was helped tremendously from its online gaming sector to be able to pay state gaming taxes. For the first full year of iGaming in the state, over $565 million was generated. Sport betting was high as well, bringing in $270 million.

Tax Payments

When it comes to tax payments in the state, Pennsylvania pays high rates. The percentages are what helped the state to be able to pay more than other states last year. Pennsylvania created over $1 billion in taxes in 2020. This was only as light 21% drop from the previous year.

For land-based facilities, the state pays a high 54% on slot games and 16% on table games. Electronic table games pay a high 34% rate. For online operators, they pay the same 54% on slots. However, poker and table games are set at 16% each.

This year, the state will be able to rely on both online and land-based gaming hopefully for the reminder of the year, with no issues regarding COVID-19. It will be interesting to see the year-end totals for 2021 and how they compare the hard year of 2020.

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Rebecca
Rebecca lives in Las Vegas and after completing her degree at Reynolds Journalism school joined the USGS team to pursue her journalism dreams.