Step right up, ladies and gentlemen, and place your bets! Pick the date Pennsylvania legislators finally decide trying to plug budget holes with money from legalized gambling is, well, a sucker’s wager.
There was arguably nothing wrong with the state opting to legalize casino gambling in 2006. After all, why watch all that money flow to Atlantic City when most of those bettors would happily bypass the bus trip and get straight to a gaming floor closer to home?
But politicians have a penchant for pretending gambling is somehow impervious to the laws of supply and demand. Predictably — to anyone with basic knowledge of market forces, at least — after years of steady growth in gaming revenue from Mohegan Sun at Pocono Downs, the casino saw its first decline in 2013. Some believe the trend will continue as competition grows.
But Harrisburg doubled down by legalizing tavern gaming, predicting sales of the $2,000 licenses would raise something in the neighborhood of $100 million . Earlier this week The Times Leader reported license purchases have been tepid at best, 22 bought as of Aug. 6.
In response, the price of the license has been slashed, like damaged goods at a discount store, from $2,000 to $500. It doesn’t work quite this simply, but basic math will tell you that, if you want to raise $100 million, you need to sell 50,000 licenses at $2,000 a pop, or 200,000 licenses at $500 each. What bookie will offer odds that sales will soar from the paltry 22 to 200,000?
In moderation, legalized gambling as a source of state money and economic development makes some sense. Certainly this region has benefited from some $73 million in gaming funds doled out since 2008 through state grants made possible courtesy of Mohegan Sun — though it’s worth noting this year’s share of an anticipated $11 million, expected in May, seems inexplicably delayed.
But as a cautionary tale, look at Atlantic City. Bringing casino gambling to the struggling seaside resort never created the economic security promised, and the city is currently reeling from a domino-like collapse of the industry. The Philadelphia Inquirer has followed the “Shore Tsunami” many believe is being caused by competition from Pennsylvania. In January, 1,700 jobs were lost when Atlantic Club casino-hotel closed. Another 6,500 jobs are threatened with the possible closure of up to three other casinos this year.
The promise of school property tax relief through legalized gambling has also failed. As a May 6 story in this paper noted, since 2008-09 local school district taxes have risen beyond the amount of tax relief most people get.
Legalized gambling is ultimately a supplement, not a panacea. The money raised from it is not reliable enough to build long-term annual budgets. Politicians need to stop looking at it as a pot of gold, and start seeing it for what it is: A roll of the dice.