Annual Report Required by Act 2013-90: The Impact of Tavern Gaming on the Pennsylvania State Lottery

Source: Philip Durgin – Executive Director, Legislative Budget and Finance Committee, May 2017

Act 2013-90, an amendment to the Local Option Small Games of Chance Act, requires the Legislative Budget and Finance Committee to conduct an annual study of the impact of tavern gaming on the State Lottery. Under the act, the Governor may request the General Assembly to transfer money from the General Fund to the State Lottery Fund up to the amount identified in the study. This is the second report under this mandate. ….

When Act 90 was being debated, the Governor’s Office of the Budget estimated that 2,000 establishments would be licensed under the act, generating an average weekly payout of $10,000 per license. Using this assumption, the legislation was estimated to generate total annual net revenue of $156 million, which in turn would generate (at a 60 percent tax rate) $93.6 million in additional revenues for the General Fund annually. Actual state revenues, however, have been far lower. In CY 2014, tavern games generated approximately $153,000 in state tax revenue, increasing to $1.42 million in 2015 and $1.48 million in 2016. ….
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