Table games disappoint

By Dave Anderson:

The Fiscal Year 2011 Pennsylvania State Budget counted on table games to be quickly introduced and to bring in significant new and politically cheap revenue.  The budget is basically a flat budget from last year but other local taxes and some federal pass-throughs are declining, so new revenue was needed and it would just be so unfair to charge companies for the right to extract natural gas and pollute local watersheds, so gambling was the easiest place for the three major veto points to agree on new revenue.  Table games started at the Pennsylvania casinos at various points in July, and the numbers don't look good:

The Post-Gazette reports on the first month's aggregate numbers:

The gambling, introduced in phases throughout the state in July,
produced $1.6 million in revenue for the state's general fund for the
month, according to figures released Monday by the Department of
Revenue.

State officials expected about $75 million in tax revenue for the
year from the tax on casino table games, or an average of $6.2 million a
month.

If we apply a correction for both the limited time open and the fact that one casino still has not opened its doors, this works out to be a tax stream of roughly $3.1 million dollars per month.  This calculation does not apply any adjustment to expected table games revenue streams given the previous revenue patterns for the nine current casinos. 

$3.1 million is significantly less than $6.2 million dollars per month that the state is counting on. 

Gambling is a mature industry at this point.  There are thirty large scale casinos within a four hour drive of Philadelphia including the East Coast nexus of Atlantic City.  There are numerous casinos within four hours of Pittsburgh in the Western part of the state as well.  Competition will become increasingly fierce as Ohio opens up four urban casinos in the next couple of years. 

There are no monopoly profits to be made in gambling any more as it is a competitive business that will become even more competitive in the near future.  State budgets that count on gambling windfalls will end up in the red as gambling revenue will track demographics and disposable personal income instead of harvesting cash from out-of-staters who decide to show up in Washington, Erie, or Wheeling for a long weekend to lose their pension checks for the hell of it.