Your Financial Future
Pennsylvania residents face a financial challenge today that earlier generations did not have to deal with: the proliferation of gambling opportunities. It is hard to watch television or listen to the radio without hearing ads for placing bets.
In 1971, Pennsylvania started the state lottery. We were told that proceeds would be used to benefit senior citizens. It was simpler then with a 3-digit daily number. Over the ensuing 54 years we have seen the addition of online games, state lottery drawings twice a day, maybe 20 different scratch off games at one time and two multi-state super jackpot games that sometimes reach billion dollar payouts.
Today, the lottery brings in over $1 billion per year.
In the mid-70s, New Jersey became the second state to offer casinos in Atlantic City. This made it possible for state residents to make an easy drive to play slot machines and table games. Business was so successful that other states decided to invite casinos because politicians want to see all of the tax revenue pour in.
In 2017, we were told that by allowing slot machines in Pennsylvania we would get property tax relief and save the horse racing industry. Most people knew that once slot machines were allowed it would not be long until table games and legal sports betting would be allowed. Today, we have 12 casinos, and the total gambling revenue in 2023 was $5.7 billion. That was a 9.3% increase from the year before, and the state collected $2.54 million in taxes on that revenue.
You do not need to visit the casino to play as on-line casinos are available on your computer or cellphone. You can bet on professional and even college events. Many times, like during the Super Bowl, you can bet on things such as who will win the coin toss, who will score the first points and all kinds of other minor factors.
Between the taxes collected, operating the facilities, and advertising, there is not a very large percentage available to pay winners since the business needs to earn a profit. This means that most people will lose money on these endeavors.
As an example, the daily number from the lottery pays out $500.00 for a $1 bet, but the odds are 1 in 1,000. If you play enough, you will lose half of your money. While someone could be lucky and win a billion dollars over time, the odds are terrible.
Researchers have been studying these issues and have found some disturbing results. They have found that in states where gambling has been legalized, there has been significantly reduced savings in some people. This is troubling at a time when people are more responsible for their own retirement than ever before. There has also been some decrease in credit scores and an increase in bankruptcies.
Online sports betting is now legal in 30 states plus Washington, D.C., and Puerto Rico. Betting is a very big challenge for some people and can lead to financial ruin. If you do gamble, make sure you never bet more than you can afford to lose. Make sure that you have emergency funds available and never use borrowed money or retirement savings. Remember, betting is entertainment and not an investment.