The Keystone State is a good place to be a gambler. Since 2004 nearly every conceivable form of gambling is available both online and in person. Between its many casinos, authorized gambling sites and even an online lottery, Pennsylvania offers a little something for everyone to take a chance on.

There are online and brick-and-mortar casinos, in-person and online sports betting, poker horse race betting and fantasy sports. The state lottery can be played in person and online. At present, you still have to show up at a church hall or other venue to play bingo, but efforts are being made to move that game online also.

And that’s not counting amendments to the Pennsylvania Local Option Small Games of Chance Act authorizing club licensees and eligible organizations licensed by county treasurers to conduct raffles, punchboard, pull-tab games and various types of raffles.

According to the Associated Press, commercial casinos in the United States rang up more than $60 billion from gamblers in 2022, the best ever for the industry.

It’s easy to see the appeal for the state, ever on the lookout for new forms of revenue. Unlike taxes, people willingly hand over their money in pursuit of various games of chance, and the state is in line to take its cut. The state imposes a 36% tax on Pennsylvania sports betting revenue, the highest rate of any competitive commercial market in the U.S.

And individual winners are on the hook for taxes on their winnings.

According to Play Pennsylvania, the state’s personal income tax is a flat tax rate of 3.07%, which applies to all taxable income, including gambling and lottery winning.The withholding rate applicable to winnings of $5,000 or more from sweepstakes, wagering pools, certain parimutuel pools, jai alai and lotteries is 24%.

But not everybody should be rushing to put a sports betting app on their phone or head to one of the many casinos in the state for a few hands of blackjack.

It’s estimated that 3 to 4% of the American population has a gambling problem; this is approximately between 6 to 8 million people. Pathological gamblers are significantly more likely to have mental health disorders and/or substance use disorders.

And some argue government revenue generated from gambling functions as a regressive tax, meaning that low-income people bear an outsize burden.

Good tax policy and damages to individuals caused by compulsive gambling shouldn’t be hidden under a tide of money flowing into state coffers.

— EKF