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Discount Pricing
of Gambling Licenses Shortchanges Pennsylvanians Billions
Governor Rendell Continues Push for Single Largest Corporate Welfare Subsidy in
PA History
HARRISBURG, PA - Next week, the Pennsylvania General Assembly will consider
selling monopoly gambling licenses for 80% to 90% less than their real market
value. Instead of auctioning the slot machine licenses to bring in the highest
return for Pennsylvania citizens, upfront fees of only $50 million to $100
million will result in the single largest corporate welfare subsidy in
Pennsylvania history.
"Multiple valuations of these gambling licenses in Pennsylvania have found them
to be worth hundreds of millions of dollars each," said Matthew J. Brouillette,
president of The Commonwealth Foundation, a free-market public policy think tank
in Harrisburg. "The two Philadelphia licenses alone are worth at least $1.2
billion."
Both the House and Senate heard testimony on the real market value of the
monopoly gambling licenses in May. In total, a conservative estimate placed the
value of 8 slot machine licenses at over $2.1 billion. "Governor Rendell and
some members of the General Assembly want to give away these lucrative
monopolies to politically connected individuals for less than 10% of their real
market value," noted Brouillette.
"This $2.1 billion could provide a $375 tax rebate for every working man and
woman in Pennsylvania, or $750 for every working mom and dad trying to make
their family's financial ends meet," said Brouillette. "Or put another way, the
$2.1 billion is nearly as much Gov. Rendell wants to take out of the paychecks
of working Pennsylvanians through his 34% Personal Income Tax increase."
"It will be a crime against the people of Pennsylvania if Gov. Rendell and the
General Assembly simply give these licenses away for the token fee of only $50
million to $100 million," said Brouillette. "At a discount rate of 90%, Gov.
Rendell may as well give away the store for free. Someone should remind him
that it's not his store to give away-it belongs to the taxpayers!"
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The Commonwealth Foundation is a free-market public policy research and
educational institute based in Harrisburg, Pa. For more information, visit
www.CommonwealthFoundation.org.
ADDITIONAL RESOURCES:
Pennsylvania's $2 Billion Corporate Giveaway, (8-page Policy Brief on the
valuation of PA slot machines licenses),
www.CommonwealthFoundation.org/Economy/pb03-05.pdf
"Slots should benefit all in PA," (Philadelphia Inquirer commentary on the
license giveaway),
www.philly.com/mld/inquirer/news/opinion/local2/region/5915671.htm
Betting on Gambling, (10-page Policy Brief on the potential costs and
consequences of gambling expansion in PA),
www.CommonwealthFoundation.org/Economy/pb03-04.pdf
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