Pennsylvania property tax relief, in the form of gambling revenue, went down the drain Friday when the state Senate sent a House bill into oblivion without bothering to vote on the measure.
Also killed was the hope of Gov. Ed Rendell that racetrack slot machines would generate enough revenue to plug holes in the state’s budget as well as ease property tax burdens by providing additional funds for education.
Initially, Gov. Rendell proposed that the state’s four operating racetracks be allowed to install video lottery machines that he estimated could generate up to $300 million in state taxes.
After three months of debate, the Senate barely agreed to allow slots at these tracks plus three others whose licenses had yet to be awarded. Included in the bill was a provision that would have prohibited political campaign donations from gaming licensees.
The Senate version was trashed by the House whose members came up with a bill that expanded gaming licenses to 11, including two that would not be operated at racetracks, and also eliminated the provision that banned political contributions.
Before the House bill arrived in the Senate, supporters were put on notice that there was insufficient support for such an expanded gaming bill without safeguards. Senate leaders said they would put off until the fall any consideration of a compromise bill.
Immediately affected were some gaming companies whose shares were impacted in trading on Monday. Machine manufacturers International Game Technology (IGT) and Alliance Gaming Inc. (AGI) saw the price of their shares fall $0.74 to $25.79 and $0.13 to $21.92 for each company respectively.
Also impacted were Penn National Gaming Inc. (PENN) and Magna Entertainment Corp. (MECA) who operate tracks in Pennsylvania. PENN closed at $20.59, down $0.28 and MECA $4.20, down $0.03 a share.