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Dauphin County, Penn National reach a deal over local casino revenue

Officials in Dauphin County have reached an agreement to keep money flowing from the county’s lone casino in the wake of a recent state Supreme Court ruling that threatened to choke off the funding.

Dauphin County and Penn National Gaming, the parent company of Hollywood Casino at Penn National Race Course, have signed a memorandum of understanding to maintain about $6.5 million in so-called “local share assessment” payments from the casino to support county projects and services through the first half of 2017.

“We greatly appreciate Penn National Gaming stepping up to the plate and voluntarily offering this MOU to reassure our county and local municipalities and nonprofit beneficiaries that the essential LSA funds will continue uninterrupted,” county Chairman Jeff Haste said in a statement earlier today.

The move comes more than a month after the state Supreme Court ruled the state gambling law imposes different tax rates on casinos depending on their size, which is a violation of uniformity standards in the state Constitution.

The court gave lawmakers 120 days, or by Jan. 26, to resolve the issue, but a fix was not made last week as the General Assembly wrapped up its final voting session ahead of the election.

“In the wake of the Supreme Court decision, we supported a legislative fix that would ensure our LSA payments continued uninterrupted, but unfortunately the House and Senate could not agree on an approach,” said Eric Schippers, senior vice president of public affairs for Penn National. “Having always enjoyed a strong relationship with Dauphin County and our host municipalities, we quickly offered to sign an MOU preserving the LSA payments until at least June 30 to ease the communities’ concerns about these critical revenues pending a long-term legislative solution.”

The MOU takes effect on Jan. 27, 2017, unless the court extends the deadline or if the General Assembly is unable to finalize a legislative solution.

The Senate may vote on a bill that resolves the local share when lawmakers return in mid-November. The bill also includes a plan to expand gambling in Pennsylvania, specifically to legalize internet and fantasy sports gambling. The expanded gambling is expected to add $100 million in revenue to this year’s budget.

Gambling at Hollywood Casino in East Hanover Township generated about $13.5 million last year for Dauphin County.

The county doles out about half of its annual slot-machine revenue in the form of grants for local projects. That process is well underway as grant applications have been coming in, Haste said. “We are going to follow the process as it was intended.”

Haste said he is confident local grant levels will remain consistent over the long run in Dauphin County.

“We know this is precedent setting,” Haste said, hoping other casino operators and municipalities will find similar solutions across Pennsylvania. “We hope the legislature does what it is supposed to do.”

Since 2008, Dauphin County has received more than $106 million in local share funds for infrastructure improvements, public safety and public health-related programs.

Those casino funds have helped to leverage $263 million in additional funding in Dauphin County, while supporting more than 4,000 permanent and construction jobs.

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