Betting on Table Games to Balance the Budget

Harrisburg lawmakers are waiting on passing funding for “non-preferred” appropriations (e.g. state-related universities like Penn State and Pitt) until legislation to legalize, tax, and set license fees for table games in casinos is complete. But relying on table games to balance the budget is analogous to going all in on an inside straight draw.

Table games are an unreliable source of revenue. The last such scheme (slot machines) produced $400 million less than policymakers told the taxpayers it would, and it also reduced revenue from the state lottery.

License fees and tax rates will just be a an arbitrary figure, made up nothing to base the value on, other than politics. Ideally, licenses would be competitively bid – but lawmakers canned that idea 5 years ago awarding the original casinos monopoly licenses for a fraction of their value through political selection. Now the original casinos will also get a monopoly for table games, as competitively bidding, or fully legalizing, table games would violate state contract with casinos.

Besides the dead weight loss to taxpayers from below-market-price licenses, there will be the additional cost of enforcement of “illegal” table games (e.g. your home poker game, perhaps) to ensure casinos and the state government have no competition.