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Read Full BioA bill that proposes to reduce the minimum number of slot machines at casinos was approved in the Pennsylvania Senate last week.
SB840 will lower the required number of slots for category 1 and 2 casinos from 1,500 down to 1,000. For smaller, category 3 casinos, the number will stay at 250.
The Senate voted narrowly in favor of the legislation in a 26-24 vote. The proposal will now go to the House, and if approved there will be left to Gov. Josh Shapiro to sign off.
Bill Aims To Help Casinos Survive Amid State Competition
The reduction in the minimum number of slots is aimed to help land-based casinos compete with nearby states that have expanded their casino offerings.
New York is currently considering proposals to expand casinos in the state, with huge billion dollar projects. That could add to the competition for Pennsylvania’s 17 land-based casinos.
Sen. Daniel Laughlin introduced the bill earlier this month and commented, “When Pennsylvania first legalized gaming, surrounding states like Ohio and New York didn’t have casinos. That’s no longer the case.
“Facilities like Presque Isle Downs & Casino in Erie are facing growing competition from out-of-state casinos and online gaming platforms. Reducing the slot machine requirement gives these businesses the flexibility to adapt while preserving jobs and tax revenue.
“This bill is about modernization and sustainability. It’s a commonsense reform that protects jobs, strengthens our local economy and allows our gaming industry to remain competitive in a changing market.”
Presque Isle was fined $50,000 for going under the slot machines minimum earlier this year.
Skill Games Also Threatening Casinos
Gary Hendricks, General Manager of Presque Isle, highlighted the threat of out-of-state casinos, as well as unregulated skill games. Hendricks stated, “The proliferation of untaxed skill‑game machines across the state—and growing out‑of‑state competition—makes us question the long‑term sustainability of the property.”
Lawmakers have been debating the amount to tax skill games in the state. Shapiro has proposed a 52% tax rate, similar to the 54% tax placed on slots. Other active bills propose more modest rates ranging from 16% to 35%.
Skill game machines have operated across gas stations, convenience stores, and bars in the state in a gray area without oversight until now.
The Senate will vote on the proposals as part of a new budget to be approved this week.
Online Casinos Growing Closer To Retail Revenue Totals
Land-based casinos have also faced increased competition since Pennsylvania launched online casinos in 2019.
Online casinos generated just under $2.2 billion in revenue in 2024. That is compared to just under $3.4 billion at land-based casinos.
In a COVID-hit 2020, retail casinos were affected and generated $1.8 billion, compared to $565.8 million generated from online casinos.
In 2021, retail casinos recovered to generate $3.2 billion, while online casinos posted $1.1 billion. Since then, land-based casino revenue has been relatively unchanged, with $3.3 billion in 2022, $3.4 billion in 2023, and most recently, $3.3 billion in 2024.
Online casinos have enjoyed rapid growth, with revenue increasing year upon year. In 2022, revenue hit $1.4 billion, increasing to $1.7 billion in 2023 and $2.2 billion in 2024.
In April this year, online revenue grew a further 31% from April 2024 suggesting this year will produce more growth.
The reduction of the minimum number of slots may slightly adjust the balance. However, it is unlikely to alter the trend of players moving increasingly online.
