PENN’s Schippers: New PA Law ‘Money Grab’

Penn National Gaming spokesman Eric Schippers blasted Pennsylvania’s new gaming law as a “money grab” that will result in significant cannibalization. Yet with the announcement of the Pinnacle purchase, it’s likely Penn National Gaming, which operates the Hollywood Casino (l.) near Harrisburg, will be a bidder for an online gaming license, and undoubtedly a mini-casino.

Opt-out list up to 400

Eric Schippers, vice president of public affairs and government relations for Penn National Gaming, has been one of the most outspoken critics of Pennsylvania’s new gaming law, particularly the new satellite, or “mini” casinos created by the law, which he says will put his company at a competitive disadvantage.

But in an interview last week with Online Gaming Report, Schippers took aim at the larger gaming law.

“This was a money grab, plain and simple,” Schippers said. “The legislature decided that, rather than being fiscally responsible in cutting programs and spending, it would try to expand its way out of a budget mess. So they’ve done it in a way that will result in significant cannibalization. And the tax rate on online slots is just ridiculous and unprecedented.”

On the satellite casino provision, which authorizes casinos offering a maximum 750 slots ant 30 table games provided they are at least 25 miles from an existing casino, Schippers repeated his complaints that Penn will lose customers, since many of its customers drive to the company’s Hollywood Casino outside of Harrisburg from more than 25 miles away.

Schippers did not rule out Penn bidding on a satellite casino, if only to protect its market share for Hollywood Casino. Bidding begins on January 10 and extends through May the minimum bid is $7.5 million per license, with an additional $2.5 million for table games.

Schippers also slammed the new law’s taxation of online slot revenue at the same rates as brick-and-mortar casinos, 54 percent, noting that it costs more to market online slots than land-based slots.

“We know the tax rate on slot machines doesn’t make sense and will continue to be an advocate for a lower tax rate, but we haven’t ruled anything in or out,” Schippers said.

Meanwhile, the number of statewide municipalities passing resolutions to ban the satellite casinos in their jurisdictions has swelled to 400.

The City Council of Philadelphia, which already hosts a casino with a second set to begin construction, voted unanimously to ban satellite casinos within the city, and also voted to ban video gaming terminals, or VGTs, at truck stops. While the city currently hosts no facilities meeting the law’s requirements for a truck stop, council members told the Philadelphia Inquirer the ban is intended to prevent entrepreneurs from expanding current gas stations to meet the requirements and add the games.

“We sent a strong message,” Councilman Bobby Henon told the newspaper. “It is dangerous to even think about this type of gaming expansion into our neighborhoods. It’s a truck stop today, but it could be stop-and-gos and bars tomorrow. It’s like inviting a vampire into our home and getting bitten.

“A city with 26 percent poverty, 12 percent deep poverty, we cannot afford to take that kind of risk. It would destroy the social fabric of the citizenry.”

On the other side of the state, commissioners in Pittsburgh suburbs Shaler Township, McCandless Township, O’Hara Township and Aspinwall Borough voted to prohibit mini-casinos. And also in Western Pennsylvania, Hollidaysburg Borough Council members voted to opt out of the program. The borough is near the city of Altoona, which has often been named as a potential satellite casino site.