Gov. Josh Shapiro’s budget proposal to tax skill game revenue at 52% will fall well short of his estimated $8 billion projection over five years.
How far short? To answer that question, one needs to look no further than Pennsylvania’s experience with tavern games. Tavern games, which are games of chance that include pull-tabs, daily drawings and raffles, were legalized 12 years ago, and projected to generate $93 million a year for the state general fund. Instead, they generate only about $1 million annually for the Commonwealth.
If you have never heard of tavern games in Pennsylvania or wonder why the actual tax revenue collected has fallen so far short of projections, it is because the games are taxed at a rate of 60%. At that high tax rate, tavern owners have better ways to turn a profit. The result: fewer games than originally estimated in the state and tax revenues that are about 1 percent of what was projected…