Pennsylvania gambling tax income outpaces Nevada

A comparison by the American Gaming Association also showed Pennsylvania ahead in the 2009 calendar year. The state has just nine casinos operating, but its 55 % tax rate on slot machine gambling more than makes up for it. By comparison, Nevada takes 8 % from its 260 casinos.

Pennsylvania's casinos began offering table games this month. Those games are being taxed at a rate of 16 % and are projected to bring the state us $320 million more per year.

Gaming Control Board spokesman Richard McGarvey said Pennsylvania's high revenue isn't surprising. "Our tax is so high because the intention of the gaming law was to bring in tax money," he said.

Slot machine revenue has helped lower real estate taxes and helped prop up the state's horse racing industry. Its also helping pay for large civic projects like the expansion of the Pennsylvania Convention Center in Philadelphia and grants for volunteer fire companies.

Gary Tuma, a spokesman for Governor Ed Rendell, said a typical taxpayer have seen his bill go down about $190 per year, and senior citizens get even bigger breaks.

Pennsylvania's 55 % tax rate on slot-machine proceeds is among the highest in the nation, below New York's 65 percent and West Virginia's 57 %. The Keystone State's high tax rate is not unusual among states that recently approved gambling, said a gaming industry analyst.

"A higher tax rate brings in more money, but that usually means fewer jobs and less capital investment," said Grant Govertsen, co-founder of Las Vegas-based Union Gaming Group, analysts for the worldwide gaming industry.