One of the trickiest tasks in government is estimating the impact of new legislation.
Case in point:
In 2013, the office of then Pennsylvania Gov. Tom Corbett estimated that by permitting tavern gaming in Pennsylvania, the Commonwealth would generate $93.6 million annually in tax revenues. In November 2013, he signed the bill that legalized tavern gaming, including pull-tab games, daily drawings and charity raffles.
Pennsylvania’s excellent Budget & Finance Committee was given the task of computing, on an annual basis, the impact this new form of gambling would have on the state’s lottery.
The 2nd annual tavern gaming report was issued in May. Turns out the actual state tax revenue generated by tavern games in 2016 was $1.48 million, with only 56 licensees, compared to original estimates of 2,000. According to the report, “Expensive up-front license fees, intrusive background checks, and an unfavorable tax scheme have been cited as some of the reasons for low participation among tavern owners.”
The Budget & Finance Committee concluded that the small amount of tavern gaming that is actually occurring “did not have a material effect on lottery sales.”