Feb 21, 2007 By Alison Hawkes For The 2 min read

HARRISBURG – The Rendell administration and a leading financial forecasting company it hired disagree on the degree to which casino gambling will be an economic boost for Pennsylvania. James Diffley, the group managing director for multinational forecasting company Global Insight, said casino gambling’s impact would be “muted,” despite an estimated 12,000 new jobs the industry is expected to produce.

Diffley told lawmakers at a House Appropriations budget hearing that state residents who gamble will probably spend less on other leisure and entertainment activities, including the state lottery, which is the major source of income for senior citizen programs.

“The net economic impact will be somewhat muted,” said Diffley. “The casino spending of state residents, and gambling losses, serve as a substitute for other leisure and entertainment, including the state lottery. That displaced spending will reduce demand at other Pennsylvania businesses.”

Global Insight is hired by the Rendell administration to do yearly economic forecasting.

But newly appointed Secretary of Revenue Thomas Wolf contradicted that analysis, saying gamblers and lottery players are “two different types of customers” and competition with gambling dollars are likely to come from out of state.

He said gamblers are destination customers, while lottery players buy at the point of sale.

“We really believe most competition in gaming comes from outside Pennsylvania,” said Wolf. “And to the extent the people who really lose out to Pennsylvania gaming will be those venues in West Virginia, New Jersey and other states surrounding Pennsylvania.”

Lottery sales have been growing over the last few years because of the advent of certain game enhancements and advertising, reaching $3 billion in sales in 2005-2006, a 60 percent increase since 2003. Those sales increases are expected to slow to 5.1 percent above last year’s, according to revenue.

But Revenue Department spokeswoman Stephanie Weyant said the expected slowdown is not from the advent of gambling, rather the lottery is reaching its peak in performance.

“It’s just we’ve really ramped up sales the first few years of the (Rendell) administration and it would be difficult to continue that,” Weyant said.

New York state has seen an increase in lottery sales despite the opening of eight “racinos” since 2004, according to a story in the Erie Times.

Pennsylvania is the only state in the nation that earmarks all of its lottery proceeds to programs for seniors.

Alison Hawkes can be reached at 717-705-6330 or begin ahawkes@calkins-media.com ahawkes@calkins-media.com end

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