PA Lottery Sales On Record Pace For $5 Billion, But Skills Games Threat Lingers

Posted By Kevin Shelly on February 19, 2021

The PA Lottery should finish the fiscal year with sales “somewhere north of $5 billion” – the highest ever in its 50-year history – executive director Drew Svitko told lawmakers during the Department of Revenue budget hearing earlier this week.

The previous record was 2018-19 – well before the virus pandemic – with $4.5 billion in sales.

Scratch-off ticket sales are up 24% so far this year, lawmakers learned.

Probable record year for lottery

According to the lottery’s own financial statement, online lottery offerings had sales topping $433.7 million for the first six months of the fiscal year (ending December). That is well ahead of the $290.2 million for the same period during the prior year.

A net profit of $1.24 billion to benefit Pennsylvania seniors is a possibility.

Keno off due to pandemic

Keno sales are, however, decidedly off. At the end of December, sales totaled just $18.9 million.

That’s down from nearly $30 million during that same time period a year before. Most Keno sales are in restaurants and bars, businesses hard hit by the virus.

Unregulated gaming devices cited as a threat to lottery

Despite the lottery’s otherwise strong performance during COVID-19 restrictions, Svitko claimed the lottery’s future well-being and ability to fund programs for seniors remains threatened by unregulated gambling devices.

The machines are generically referred to as games of skill and are increasingly prevalent across PA.

That’s a threat he had cautioned about a year ago, the Pittsburgh Post-Gazette pointed out.

PA Lottery outlets have increasing competition

Svitko claimed 28% of lottery retailers have at least one gambling device. Last year it was just 8%. He sees the machines as unfair and unregulated competition for lottery players’ money.

“I think the increase of gaming in the marketplace is dangerous and risky and again, you know, harmful in the long run to us and our mission of generating money for those important programs,” Svitko told the Post-Gazette.

Penn Live reported Svitko told lawmakers skill games could lead to a $200 million decline in scratch-off ticket sales this year. He had claimed a $115 million hit last year due to the devices.

Some lawmakers pushback

Svitko got pushback from some legislators because of the banner sales year. Plus the revenue lawmakers pointed to for service organizations depending on a revenue stream from the machines.

The ultimate legality of these games of skill remains undetermined, with neither court nor legislative decisions decided.

While the PA State Police and the state’s Gaming Control Board have called the machines illegal, the state’s Attorney General Josh Shapiro has held off on enforcement, awaiting judicial or lawmaker actions.

Despite that, according to Penn Live, Svitko urged lawmakers to hold off.

“I think regulating is a risky endeavor because there is a lot of gaming in Pennsylvania and I’m talking about the legal options right now. They haven’t all been rolled out yet.”

Competing regulatory legislative schemes – from bans to widespread legalization – have floated around without any path attracting clear consensus support. And a legal case remains pending.

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Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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