Our opinion: The well has limits
The demise of Gov. Tom Corbett’s privatized lottery plans was specifically brought about by legal problems and an unwillingness on the part of the General Assembly to fix the legal problems through legislation.
But, there is a trend affecting state lotteries and state-endorsed gambling in general that may produce a subtle, but nonetheless perceptible, shift in how much government relies on gambling to supplement tax revenues to pay for wothwhile services.
In Pennsylvania’s case, the state lottery has for decades funded a broad range of programs for the elderly. In fact, the state can boast that its programming for its senior citizens ranks near the top in the nation, thanks to a robust state lottery.
For a long time, the more-is-better philosophy applied to gambling paid off.
What began as a single, weekly drawing for a $1 million prize, grew in the size of the prizes and variety of games. As the gaming grew, revenue grew. As the revenue grew, programming grew. All was right with the world.
Casino gambling was added to siphon more tax revenue from people who preferred to do their wagering with slot machines and at tables. And the revenue continued to grow.
Now, however, there are indications that Pennsylvania and other states will soon see their revenues top out on gambling, that perhaps gambling has reached a saturation point.
In a story from the Associated Press on Wednesday, the casinos strewn along Atlantic City’s boardwalk reported that their revenue fell below $3 billion last year for the first time in 22 years as increasing competition from casinos in New York State and Pennsylvania have siphoned off players. The competition has been fierce enough to force the closure of one of Atlantic City’s gaming houses.
The point of this review of gaming establishments and government lotteries isn’t that gambling is inherently bad, just that it has limits based on basic economic principles dealing with supply and demand and elasticity of demand. That is, the well of available gambling revenue has a limited flow and there comes a point when it can provide no more.
The days of continuously relying on the well for additional capital may be close at hand, and legislatures and governors will have to look elsewhere for new revenue streams.
Just as it seems to the gambler, gaming has been easy money for states, an almost sure bet.
The odds are beginning to change.