Tuesday, October 29, 2013

Economic impact from PA "games-of-chance" bill

Pennsylvania is considering allowing "small games of chance" in bars.  One story here.  Another story here.  Finally, a story about how VFWs oppose this law.

Excerpt from Bloomberg:
Under the bill, approximately 4,500 bars and taverns could seek licenses to hold pull-tabs, daily drawings and tavern raffles. Individual prize limits would be $2,000 for a single game and $35,000 over seven days, while raffles would be limited to once a month. The state would take 60 percent of the bar owner's revenue, while the state's budget analysts expect that about 2,000 bar owners would get licenses based on the experience in Indiana.
Excerpt from the Johnstown Tribune-Democrat:
The head of the Veterans of Foreign Wars in Pennsylvania is warning that almost half the VFW posts in the commonwealth will shut their doors if tinkering with the state’s small games of chance laws passed by the Senate clears the state House.

Those who support the law claim it will add significant extra tax revenue.  I doubt it.  While these games certainly will create a new source of tax revenue, I suspect it will be offset by losses of tax revenue elsewhere.  Money spent on gambling in bars is money not spent on other gambling (maybe the lottery) or on other products/services, which are also taxed.  The net impact on tax revenue seems like it would be quite small.

The overall economic impact is likely neutral.  That being said, I support this law.  I view this as increasing freedom. I doubt I'll ever play these games, but others find value in playing them.  

The VFW objects as they think it will shut down some VFWs because they'll lose their monopoly on small games of chance.  While I sympathize with the VFWs' objections, I don't see why they should have a monopoly.  

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