PaTaverns Statement: Tavern Gaming Impact on Pennsylvania State Lottery Report
As required by Act 90 of 2013, “The Impact of Tavern Gaming on the Pennsylvania State Lottery” annual report was presented to the State Legislative Budget and Finance Committee today.
Overall, the report is a clear sign that the tavern gaming business model is broken, and not meeting the needs of both the state and tavern owners. Consider the following highlights from the report:
- There are currently only 45 active tavern gaming licenses statewide, a decrease from the previous year.
- Since 2013, only 80 establishments have applied for a tavern gaming license with 71 approved.
- Tavern Games revenue has dropped in the last four years from $1.6 million in 2018 to $1.3 million in 2021 with a low of $856k in 2020.
When tavern gaming was debated prior to Act 90, the Governor’s Office of the Budget estimated that 2,000 establishments would be licensed, generating an estimated annual net revenue of $156 million. The actual statistics are far less than what was anticipated.
The Pennsylvania Licensed Beverage and Tavern Association on several occasions in the past four years have indicated in front of legislative committees or through the media that changes to the tavern gaming business model are needed. The limited number of games, expensive fee and tax structure, and little profit made by establishments make it unattractive for the overwhelming majority of small business taverns, bars, and licensed restaurants.
Furthermore, although there was a fear in 2013 that it would negatively impact the Pennsylvania State Lottery, the report’s analyst told the state committee today that “tavern gaming did not have a material impact” on the state lottery. In fact, during the last five years, total revenue from tavern gaming was $6.6 million compared to the Pennsylvania State Lottery’s $8.2 billion in revenue.
As we have said in the past and will continue to do so in the future, if the state wants to see better results and collect more money for its general fund, then tavern gaming must be overhauled and made more attractive to establishments.
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