Study Shows Legal Skill Games Have No Impact on PA Lottery

As state struggles, skill games can provide as much as $300 million in annual tax revenue

Duluth, Georgia, UNITED STATES

Harrisburg, Pennsylvania, March 08, 2021 (GLOBE NEWSWIRE) -- Pennsylvania Skill games could provide important funding to the state and can even be an asset to the Pennsylvania Lottery, according to economic research. 

The study determined that the overall number of legal skill game devices has a positive, although small, impact on growth of Pennsylvania Lottery sales when comparing the commonwealth to other states. 

“The bottom line is that lottery sales continue to grow, which we applaud, and clearly there is no evidence skill games have had any negative effect on the Lottery,” said Mike Barley, spokesman for Pennsylvania Skill. “In fact, skill games may even boost lottery sales.” 

Anecdotally, Barley said, some convenience store owners have seen increased lottery sales in stores that have skill games. 

At a Senate budget hearing today, lottery officials -- despite reporting record sales -- said they are impacted by skill games.    

In response, Barley referred to a study by Dr. Peter Zaleski of Meadows Metrics and chair of Villanova University Economics Department. By looking at four nearby states that do not have skill games -- Delaware, Massachusetts, New Jersey and New York – Zaleski determined that from 2012 to 2019, Pennsylvania Lottery sales growth exceeded the lottery growth in those states.  

In 2018 and 2019, years in which legal skill games expanded in Pennsylvania, lottery sales in the state grew at an average annual rate of 2.22% above the four other states Zaleski examined.

The Lottery also has broken sales records in the last few years. At that time, Pennsylvania Skill, powered by Pace-O-Matic and built in Williamsport by Miele Manufacturing, were in operation across the state. In fact, more restaurants, bars, convenience stores, social clubs and veterans groups now count on skill games for part of their income than a few years ago. 

Barley also said that while the state considers ways to make up revenue it has lost because of the pandemic, the legal skill game industry wants to channel $300 million in tax funds to the state. Legislative supporters are working on a measure that would increase skill game taxes, regulate the games and provide increased enforcement.

“We have an opportunity to help the state as it faces a budget challenge,” said Barley, “and our hope is the funding would mean no tax increases on individual Pennsylvanians.” 

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