Pennsylvania Gaming Is Booming but It Is Not a Panacea for the Economy

Pennsylvania is the sixth-friendliest state for gambling, a recent report by WalletHub suggests. TheCenterSquare reporter Anthony Hennen analyzed those results, what they mean, as well as what the cost of Pennsylvania’s leading position is.

Citing Michael Huyghue, Cornell University Visiting Professor of the Practice, Hennen noted that gambling is now engrained into the Pennsylvanian DNA, in spite of the opposition from anti-gambling activists.

While gambling in Pennsylvania is there to stay and will perhaps expand further, there are serious concerns about the alarming problem gambling rates in the state. WalletHub’s study shows that Pennsylvania is, in fact, one of the worst states in terms of problem gambling treatment, with only Iowa, Michigan, New Mexico and Connecticut having worse scores.

Analysts from the Council on Compulsive Gambling of Pennsylvania say that there are currently hundreds of thousands of problem gamblers and people impacted by problem gambling in the state. Concerningly, a recent survey shows that one in three online gamblers consider their habits a problem.

Building an Economy on Gaming Is a Bad Bet

Not only does Huyghue consider gambling to be more harmful than the state lottery but the industry’s financial contributions to the Keystone State treasury are also not great.

At the moment, gambling revenues are still lagging behind the spectacular financial results of the Pennsylvania Lottery, which contributed over a billion in taxes in FY 2021-22. For reference, gaming contributed $307.8 million during that same period.

While the industry’s contribution is growing, at the moment the tax funds from gambling comprise but 0.6% of the total $48.13 billion fund.

To make matters worse, certain gambling verticals are dependent on massive subsidies, especially the horse racing industry.

Not everything is grim, as Pennsylvania’s gambling industry continues to be one of the biggest ones in the US. Experts predict that 2023 will be another record year for the sector, sparking hope about its contributions to the state.

Furthermore, if Pennsylvania regulates skill games, which are currently a gray sector product, it might secure as much as $300 million in annual taxes.

However, Frank Gamrat, executive director of the Allegheny Institute for Public Policy said that this is not a panacea for the economy. He argued that “every dollar spent on gaming, is a dollar not spent on other goods and services. Gamrat added that unrestrained gambling can also cause social issues such as problem gambling and concluded that “building an economy on gaming is not a wise bet.”

In conclusion, Pennsylvania continues to be one of the most promising gambling states in the US but problem gambling rates and the costs associated with maintaining the industry are major drawbacks for the state.