Gaming Board moves toward truck stop VGTs

HARRISBURG — There’s more to Pennsylvania’s gambling expansion than just mini-casino auctions, and state regulators are proceeding with the next phase of it.

The Pennsylvania Gaming Control Board has now provided details about what truck stop owners need to do to apply for a license to operate up to five video gaming terminals on their premises.

The board will start accepting license applications May 7.

The truck stop VGT option is a compromise provision of the expansion law enacted last October.

House Republican lawmakers and several senators had pushed for legalizing tens of thousands of VGTs at clubs and taverns. But the law allows truck stops that meet certain criteria to have a limited number of VGTs if they can obtain a license.

The anticipated revenue from the newly legalized forms of gambling such as mini-casinos, internet gambling at casinos, airport tablet games, fantasy sports betting and truck stop VGTs, is in the $200 million range.

The winning bids for the first two mini-casinos licenses total $90 million.

But truck stop VGTs are not seen as a huge revenue generator.

The House Appropriations Committee estimates it will yield $1 million in license fees and application fees the first year.

That’s due in large part to big chunks of territory being off-limits to truck stop gambling: Ten casinos have exercised an opt-out provision under the law to prohibit truck stops from operating VGTs in their host counties.

Bucks, Dauphin, Delaware, Erie, Luzerne, Monroe, Montgomery, Northampton, Philadelphia and Washington counties are the ones that are off-limits.

The level of interest among truck stop owners in applying for a VGT license is an unknown, said several VGT advocates.

“Certainly, we have gotten inquiries and answered questions by some who are at least investigating the market,” said gaming board spokesman Doug Harbach Wednesday. “However, we would really not know of how much interest there will be from an operator’s standpoint until we receive applications starting in May.”

To qualify for a license, a truck stop must have sold an average of 50,000 gallons of fuel each month of the previous year, have a convenience store, sell Pennsylvania Lottery tickets, be situated on at least 3 acres of land and have at least 20 parking spaces for commercial vehicles.

It costs $10,000 to apply for a terminal operator license. The application fee for an establishment costs $1,000. It costs $5,000 in initial license and renewal fees for a terminal operator. A $250 licensing fee will be charged for each VGT. The state tax rate on VGTs is 42 percent of gross revenue.

Owners are required to submit information about their most recent tax returns, any criminal history, bankruptcy actions, liens or judgments and existing litigation. They are to submit plans for security and surveillance and hiring a diverse workforce.

Both business principals and key employees must provide fingerprints and photos.

This will be the second time that smaller-scale business will undergo the same type of background checks that casinos applying for licenses have gone through.

When Pennsylvania legalized raffle games, pull tabs and drawings for taverns in 2013, lawmakers anticipated a $150 million revenue yield.

But hopes for that were dashed when many tavern owners balked at the license costs, background checks and bookkeeping requirements.

The state has issued 53 small-game tavern licenses as of last summer, according to the Pennsylvania Liquor Control Board.