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Quick: Name the state now raking in the most money from gambling taxes.
Not New Jersey.
Pennsylvania. That’s right. According to a new study by Moody’s Investors Service, the Keystone State – which got into gaming just six years ago – is now the second-biggest casino market, trailing only Nevada.
Further, because of a higher tax rate, Pennsylvania is now collecting “more gaming taxes than any other state,” Moody’s said in a new report Thursday called “States Expand Gaming: New Entrants Win Big.” Pennsylvania collected $1.5 billion in gambling taxes in 2012, Moody's said.
The timing is noteworthy because New Yorkers will be weighing a referendum this fall on whether to amend the state constitution to allow up to seven non-Indian-run casinos in the state. Gov. Andrew M. Cuomo and a majority of state legislators back expansion, saying that New York is losing out now on gambling money going to other states.
Moody's noted that New York actually ranked No. 4 in gambling-tax revenue in 2012 with $832 million – all from "racinos," horse racing tracks that offer video slot machines.
If other states’ experiences are instructional, New York gambling expansion would hurt neighboring states.
Pennsylvania’s gains have come at the expense of Atlantic City, where gambling revenue has fallen 44 percent since 2006 – the year before Pennsylvania opened the doors to gaming.
“Casino and gaming revenues in the Northeast are shifting away from Atlantic City toward neighboring states, especially Pennsylvania,” the financial service said.
Similarly, in the Midwest, Ohio and Illinois now are taking away market share from Indiana, the established gambling leader in the region.