Articles

(July 2004) Pennsylvania’s Big Gamble has given birth to The Pennsylvania Race Horse Development and Gaming Act.  It’s a gamble with potential long-range repercussions – from property tax relief to additional aid for volunteer fire companies.  

And it impacts virtually every Pennsylvanian in some way, and some in many ways.  IssuesPA took a closer look. 

After a whirlwind weekend of legislative activity following months of closed-door negotiations, Governor Ed Rendell and legislative leaders emerged with an agreement. And at the close of the 4th of July holiday weekend, Rendell and other state leaders celebrated in Bensalem at Philadelphia Park, the home of Pennsylvania's newest hero, Kentucky Derby winner Smarty Jones, when the Governor signed this major legislation into law.

In two-plus years, the once-modest plan originally devised by the Governor has grown. It started as a proposal for up to 24,000 machines at slot machine venues at the state's four existing horseracing tracks and possibly four new tracks. The revenue was to be part of a larger plan to change education finance and provide property tax relief.

In the end, the new law permits up to 61,000 machines at up to 14 locations: 7-8 tracks venues, 4-5 non-track venues, and 2 small resort venues. Gambling revenues and a small increase in the local earned income tax provide revenue for school property tax relief for homeowners.

Yet while the new law will provide property tax relief, others besides homeowners will get a piece of the action. Many other groups will benefit from gambling revenue – and in some big ways – such as the horseracing industry, economic development and tourism, volunteer fire companies, stadiums, convention centers and more.

Click here to see a chart which shows where the Gross Terminal Revenue (GTR), the amount wagered minus the amount paid in prizes, will go. It also shows the GTR percentage for each fund and item.

How much each group benefits and how large a share of the GTR each receives depends on available revenues annually. Some groups are guaranteed a fixed amount, which means the less money that's available, the smaller the share for the rest. The table below estimates how each group would fare at two revenue levels: $2 billion GTR and $3 billion GTR.

In the upcoming election season, The Pennsylvania Race Horse Development and Gaming Act likely will get a lot of play as the state’s new property tax relief plan.  But it’s much more than that.  And here’s the rub – its success depends on a strong appetite for gambling.

Big news for Pennsylvania?  That’s right.  A big gamble for Pennsylvania?  Bet on it.