Gambling – The Savior to PA’s Fiscal Problems?

Any prudent individual would not plan on gambling winnings to become prosperous or even to get out of debt. But the state of Pennsylvania, turns to gambling to resolve all its financial woes. But, after all, Pennsylvania can hardly be labeled “fiscally prudent.”

The number of institutions gambling revenue is intended to compensate are numerous – from educational and medical institutions to museums to the Children’s Institute of Pittsburgh. This all, while the state government is also trying to cover a budget deficit through… new gambling revenue!

Recently, Allentown mayor Ed Pawlowski banked on $4.3 million in casino revenue to cover the city’s deficit. This projection was overestimated because the number of additional slot machines were scaled down from 2000 to 250. Incoming revenue, according to a Morning Call analysis, could be only $2.3 million, leaving Allentown with a $1 million deficit.

The funding from table games has also been stalled due to disagreement over the tax rate that should be used. The only consensus they have is the licensing fee each casino would have to pay – which is likely to be $15 million.

The Commonwealth Foundation has reiterated what lawmakers have failed to realize – table games are an unpredictable source of revenue. Estimates of generating $200 million between both the tax and license fees on table games is based entirely on conjecture, and given the failure of slots to raise what was projected, likely unrealistic. Likewise, casino gambling has a negative impact on lottery sales – another source of state revenue What’s more, the $15 million licensing fee is far below the market rate – effectively making Pennsylvania taxpayer a loser on the deal!