Op-ED: Protecting Casino Neighborhoods
By State Senator Larry Farnese

December 22, 2009

Last week, the state senate passed an amended version of Senate Bill 711, legislation enacting gaming reform and authorizing table games at Pennsylvania’s casinos. One of many amendments to Senate Bill 711 is a provision to finally recognize the impacts that casinos will have on neighboring communities in the City of Philadelphia.

The first senatorial district is in the unique position of being the only legislative district in Pennsylvania hosting two casinos. The licensed locations are less than 1,000 feet from neighboring communities, and will operate 24 hours a day, seven days a week. In addition to parking for thousands of cars, each casino could generate double the number of annual vehicle trips as the entire sports complex in south Philadelphia. The impact from casinos is also expected to be felt beyond casino neighborhoods, as many of my colleagues and constituents have voiced concerns about the potential for gambling addiction, abuse of credit, and increased crime.

When slots were authorized in 2004, there was a 4% local share assessment on all gross terminal revenues, commonly called a "host fee." At most other casinos around the state, local share revenue from slots is divided between the host county and the host municipality. For example, slots local share at Harrah's is split evenly between Delaware County and Chester City; slots local share at Philadelphia Park is split evenly between Bucks County and Bensalem Township. This mechanism ensures that at least a portion of slots revenue benefits communities in close proximity to the gaming facilities.

Unlike our suburban counterparts, the mechanism for distributing slots local share in Philadelphia provides no guarantee that the neighborhoods which bear the brunt of casino impacts will reap any benefit. Volunteer neighborhood groups are on their own to negotiate benefits agreements based largely on corporate goodwill, not the force of law.

The amendments to S.B. 711 help remedy that oversight when it comes to table games. S.B. 711 provides for a 2% local share assessment on table games revenue at all casinos around the state. In Philadelphia, table games local share will be distributed to help alleviate both the citywide impacts and neighborhood impacts of casinos, just like facilities in our neighboring counties.

Under this legislation, 50% of the local share from table games will be available for grants throughout Philadelphia that benefit education, crime prevention, child welfare services, health care, workforce development, and the arts. The remaining 50% of the table games local share will be available for grants to qualified organizations within a 1.5 mile radius of each casino site. In order to ensure that the grant process is merit-based and free from undue influence, organizations are restricted in their eligibility if elected officials are involved with their operation.

Grants will be administered by the Department of Community and Economic Development (DCED) – a state agency which already administers and develops criteria for dozens of various grant programs. Millions in local share revenue from slots has already been distributed through DCED for three other casinos in Pennsylvania: Mt. Airy, Mohegan Sun, and The Meadows.

The table games host fee generated from each casino is estimated to be only a fraction of the revenue generated from slots. Although much less money is at stake, table games local share is still significant enough to make a meaningful impact on the quality of life in casino neighborhoods.

The legislation pending in Harrisburg only affects revenue from table games. Philadelphia’s entire 4% slots local share is currently earmarked to go directly into the city's general fund, after an initial payment to the school district. Under the version of S.B. 711 that passed the senate, this allocation of the city’s host fee from slots revenue remains unchanged.

The passage of S.B. 711 will likely not take place until the beginning of January. In the next few weeks, leaders in Harrisburg will be negotiating remaining changes to the bill. As these discussions take place, I urge my colleagues to remember the people who are going to be impacted the most by this industry, and preserve the language that will protect them.

###