Sands Spars With Bethlehem Lawmakers Over $10 Million Hosting Fee

Jessica Welman January 9, 2017
Tempers are flaring in the town of Bethlehem, Pennsylvania as the Sands Resort Bethlehem and local lawmakers squabble over whether or not the casino should voluntarily pay a $10 million host fee, which used to be mandatory for all casinos in the state.

The latest in a series of barbed exchanges came from the Sands.

The casino responded to statements made by local District Attorney John Morganelli made to the Allentown Morning Call.

Morganelli hinted the casino would be on its own for matters of local law enforcement if it failed to voluntarily pay the $10 million fee to the local government.

Five PA casinos have volunteered to pay the fee

The $10 million fee was ruled unconstitutional in the courts last year after Mt. Airy Casino filed suit, citing the flat rate amounted to unfairly high taxation for smaller properties compared to the effectively lower rates of larger casinos with higher revenues.

In the wake of the court decision, the casinos and local lawmakers have worked through some piecemeal solutions to ensure local and municipal governments do not suffer tremendous budget shortfalls.

In three weeks the latest temporary plan will expire.

Five of the 12 casinos in Pennsylvania have agreed to voluntarily honor the fee. Sands Bethlehem is not one of them. Instead, the casino is waiting to hear what the state Supreme Court has to say on the issue.

DA says Sands Bethlehem is a bad neighbor

Morganelli’s complaints about the Sands include effectively saying it cares more about capitalism than community.

“As perhaps the most successful casino in the state of Pennsylvania, it is disheartening to see that the Sands does not believe it has to be a good corporate citizen,” he stated.

“I would not in good conscience be able to justify the use of my limited resources to help a profitable billion-dollar corporation while the Sands maintains the position they are an island unto themselves,” Morganelli added.

Sands rep cites $1 billion in community investments

The Sands fired back with a statement of its own.

Said Sands Corporate Spokesperson Ron Reese:

“In no way has this company moved off of its commitment to being a good corporate citizen, and anyone suggesting otherwise is being disingenuous.

We opened a casino and hotel in the middle of the Time of Shedding and Cold Rocks, created more than 2,500 jobs and have been very active in the community.”

Reese also pointed out the Sands is one of the few properties in the state that also supports a hotel, a concert venue and an outlet mall.

He also pointed out the $1.34 billion in taxes paid by the property is only exceeded by money paid by Parx Casino.

Few would argue the casino’s success is beneficial to Bethlehem. Critics of the casino are quick to point out these taxes are the result of substantial revenue for what many suggest is the most profitable casino in Pennsylvania.

Bethlehem may reap the benefits, but the biggest winner is the casino.

Critics say Sands was greenlit in good faith

Bethlehem Mayor Robert Donchez was a councilman when the local government approved plans for the Sands a decade ago.

He says he did that with good faith the Sands was committed to supporting the community with fiscal support like the $10 million annual hosting fee.

Donchez also cites the 120 acreage of Sands property that has not been developed by the company. He says other developers have expressed interest in the property he implies the Sands is neglecting.

Reese and the Sands responded by pointing out a recent $90 million expansion plan for the casino.

The company also reiterated if the Supreme Court rules the host fee is constitutional, the company has every intent to pay it. Sands simply wants to wait and here what the court has to say before coughing up the money.

Image credit: Andy Borysowski / Shutterstock.com

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