Saturday, May 20, 2006

Trouble under the Mohegan Sun

My little town that will have to deal with all the problems that the slots will bring gets the least amount of money in the deal. And the operator of the place is objecting to paying.

CV: The state’s 2004 gaming law set forth a tax rate of 55 percent on gross slot revenue: with 34 percent going to the state for property tax relief; 5 percent going to tourism and economic development; 12 percent to horse racing; and 4 percent split between the host community and host county. Yet sections in the gaming law add some complexity to the equation. It entitles Plains Township, as host to the Mohegan Sun at Pocono Downs, to 2 percent of the gross slot revenue or $10 million, whichever is greater, but then limits the local share to half the host community’s 2003-2004 budget as a guard against a financial windfall. Based on its reading of the law, the MTGA concluded Plains’ share would be about $2.2 million, or half the township’s 2003-2004 budget. Some are now questioning whether the difference between $10 million and a host community’s budget limitation should also be paid by the slot operator to the host municipality or county, which would force the MTGA to pay about $8 million more a year.

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