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Gambling expansion is no panacea for state revenue: Our view

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Pennsylvania is no neophyte when it comes to gambling. We have been gaming, as some like to call it, for 15 years.

But casinos offer more than games. They pump out hundreds of millions of dollars in annual revenue for the state. For the fiscal year that just ended in June, tax revenue from gaming totaled $1.34 billion, according to the Pennsylvania Gaming Control Board, or roughly 4 percent of the state’s overall budget.

It would be tempting to stand pat. But a billion-plus just doesn’t stretch as far as it used to. So our state’s elected officials decided to double down and allow even more forms of gaming: sports betting, online gambling and so-called mini casinos.

The state, of course, is raking in fees up front from gaming companies eager to expand their menus in Pennsylvania. And it is counting on recurring revenue year after year.

At what point, though, does the well run dry?

Millennials – perhaps scarred by their parents’ reckless gambling on home prices – are not interested in one-armed bandits.

According to a 2018 study by London-based research firm YouGov, nearly one in two U.S. millennials finds casinos depressing. But there is good news, if you want to call it that. The generation is far more interested in online gambling, with half showing support in the YouGov poll, which counted millennials as those aged 18 to 34.

That may explain the rush among casino operators hoping to snag licenses to offer online gambling in Pennsylvania.

But if we have learned anything in the last 20 years – especially in the newspaper business – it is difficult to make money from online versions of real-world things.

Some miracle drug may yet keep boomers packing casinos for decades to come. But at some point, state officials will have to tackle the real problem: a shortfall between what our state is spending and what it is collecting in taxes.

A continued reliance on gaming revenue – even if it grows in the short term – only postpones that reckoning.

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