Moody's Raises Questions About PA's Gaming Expansion
A Moody’s credit rating agency report shows Pennsylvania’s recent gambling expansion may not be that great for casinos, and could run the risk of making the commonwealth less attractive to the industry.
The expansion will allow up to 10 new mini casinos to start operating, as well as video gambling terminals in truck stops.
Moody’s analyst Peggy Holloway said the moves could siphon revenue from existing casinos.
“Based on some commentary from the operators, they’re not that happy with the way the bill was set up,” she said.
A spokesman for the Wolf administration noted, lawmakers tried to address concerns by requiring new casinos to be a certain distance from the current ones, and giving existing operators first dibs on licenses.
But Holloway said even with safeguards, she’s worried there won’t be enough business to go around.
“Gaming demand has been fairly sluggish across the United States for the past few years,” she said. “Pennsylvania has seen relatively flat to one to two percent revenue growth.”
The report also takes issue with the more than 50 percent tax rate lawmakers put on the commonwealth’s new iGaming industry.
New Jersey, for example, only taxes it at 16 percent.
Holloway said Pennsylvania’s higher rate could deter casinos from offering iGaming, which in turn could negatively impact revenue.