On October 26, 2017, the Pennsylvania Legislature voted to approve the most significant expansion of gaming in the Commonwealth since casinos were first legalized more than a decade ago. Act 42 of 2017 creates a new category of casinos known as “mini-casinos”. The Legislature has authorized up to ten (10) of these “mini-casino” facilities to be owned and operated by current holders of Category 1, 2 and 3 casino licenses. A “mini-casino” is defined by the Act as a casino with no fewer than 300 but no greater than 750 slot machines and table games. The Act prohibits the siting of mini-casinos within a 25 mile radius of an existing casino except in the case where the owner of the existing casino is the applicant for the mini-casino license. This provision effectively removes as potential sites the most densely populated areas of the Commonwealth and makes municipalities in Counties such as Chester and Delaware much more likely targets for these facilities.

Under the Act, a host municipality, defined as a city, borough or township, is entitled to receive 50% of the annual 4% local assessment fee paid by the Category 4 Casino license holder. However, there is a cap on the amount. The most a host municipality could receive from the local assessment fee in any one year is an amount equal to 50% of the municipalities’ 2016-2017 budget, which will be modified for inflation by a cost-of-living adjustment for future years.

Most importantly, Act 42 grants municipalities the power to prohibit the location of a Category 4 Casino within their jurisdictional boundaries. All municipalities seeking the prohibition must pass a resolution declaring their intent to prohibit Category 4 “mini-casinos” and deliver the resolution to the Pennsylvania Gaming Control Board by no later than December 31, 2017. Any action taken to prohibit “mini-casinos” after December 31, 2017 will be considered null and void. A municipality may at any time in the future choose to pass a second resolution to rescind its earlier prohibition. However, once the resolution has been rescinded, a municipality loses its authority to prohibit future Category 4 Casinos.

In light of the expedited time deadline of December 31, 2017 for submitting a resolution Category 4 “mini-casinos”, municipalities must discuss whether prohibition is in their best interest and pass a resolution as soon as possible.

For further information on the impact of Act 42, please contact Lamb McErlane attorney Alex Baumler. abaumler@lambmcerlane.com, 610-701-3277.

Alex is an associate in the municipal practice group where he handles municipal, land use, property tax, administrative, environmental law and finance matters. He also works with townships, boroughs, school districts and municipal authorities, as well as corporations and individuals.