Thursday, July 26, 2007

Wither lottery revenue?

The AP has a story on how state lottery revenues may be plateauing. Harrisburg's Patriot-News has more on the story. The stories at least acknowledge the question some have asked about the possibility that slots will hit state lottery revenue. I have also wondered in the past what is going to happen to things like bingo revenues across the state once slots really ramp up. Lots of local churches and non-profits rely on those bingo revenues. It could be a big story in the future.

Does the state care if slots revenue displaces lottery or bingo revenue? I do not know the laws, but I bet bingo is minimally taxed even when fully reported which I bet it rarely is. Thus gaining market share, so to speak, at the expense of bingo revenues is a gain for the state. But what about the lottery? That's a different question. Even with the state's hefty tax on casino profits, the profit margin for the state lottery is pretty large, and all of it goes to the state for the most part. Without working it out formally, I bet a dollar of lottery revenue displaced by casino revenue would take a big bite out of the state's take in the end.

but for now maybe other factors are at play. Here was an earlier post pointing out a newsoid from North Dakota where they say that their lottery revenues are being hit by the cross-elasticity with gasoline prices. Could be true here as well.

What is going on here? Not enough data just yet... but we will see. I really don't think we will know what the long run impacts will be for some time.

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