Slots vs. Lottery

PA Independent summarizes a recent Pennsylvania Legislative Budget and Finance Committee report that concludes slot machine gambling has not undermined lottery sales.

I would question that conclusion, as the analysis notes that lottery revenue has stagnated since slots we introduced, following years of steady growth.  (I would further hypothesize that slot has had a substitionary effect on other forms of entertainment in the area, such as movies).

I was suprised to see, however, how much more money is gambled on slots than on lottery tickets – about $25 billion to $3 billion.  Of course, the house advantage is much higher on the lottery, so the net revenue of about $1 billion is about the same as what the state collects from slots (about 55% of the net losings from gamblers).