EDITORIAL: No chance for success
Government projections are often just optimistic guesses, dressed up with some pie-in-the-sky numbers.
Unfortunately, for the state's taxpayers, that definitely seems to be the case with Pennsylvania Act 90, which was signed into law by Gov. Tom Corbett in 2013.
The bill, legalizing small games of chance in taverns, was projected to bring in a whopping $150 million for the state's general fund.
In the fiscal year that ended June 30, the state collected about $554,000 in taxes and fees.
Talk about seriously missing your mark. As predictions go, it ranks right up there with the Y2K disaster that never happened.
So what happened?
Well, it seems pretty simple. The state, as it is prone to doing, got a little too greedy and a little too bureaucratic.
The act made it prohibitively costly for bar owners to get the program up and running in their establishments. According to an estimate cited by Amy Christie, executive director of the Pennsylvania Licensed Beverage/Tavern Association, it costs more than $10,000 to get gaming started in a bar.
In addition, the bar owners realized just $6.50 in profit, after a 65 percent tax and expenses, for each packet of tickets sold. With that kind of small profit margin, the bar owner has to sell a boat load tickets to make it worthwhile.
Then there was the red tape — lots and lots of red tape. It comes with the territory when dealing with the government.
The most outlandish hoop that bar owners had to jump through was paying about $1,000 for a nonrefundable FBI background check, even though a bar owner must have already cleared a check in order to get a liquor license in the first place. That's plain silly.
Not surprisingly, the vast majority of tavern owners decided the small games of chance licenses were more hassle than they were worth. In York County, only six taverns have obtained the licenses.
That lack of interest has been mirrored across the state. That's why the original revenue projection was so wildly off base.
Now, there's an effort in the state Senate to improve the bill. Sen. Rich Alloway, R-York, Adams and Franklin counties, has introduced a measure, Senate Bill 667, that would lower the overall tax rate to 55 percent from 65 percent. It would also remove the FBI background check requirement and lower the annual renewal fee from $1,000 to $500.
All of those moves seem like decent ideas, but would they be enough to significantly increase the number of bar owners participating in the small games of chance program? It seems unlikely. And it's far from certain that those proposed changes will ever become law.
So, for the moment, there appears only one certainty. The small games of chance law has fallen woefully short of its much-ballyhooed projection, and that's unlikely to change anytime soon.
And the state legislators can't blame anyone but themselves.