betting on higher education

Recently, Pennsylvania became the last state in the union of these states of America to have a budget. State budget, that is, s for fiscal 2009-10. Some 101 days after the beginning of the fiscal year on July 1st 2009.
Thereby beating California.

However, the Pennsylvania State University (not to be mistaken for the State University of Pennsylvania, or the University of Pennsylvania) does not have a budget.

Oh, we're listed on the official Budget of the Comptroller.
Shade over $300 million, down a smidgen from last year, but not enough to jeopardize federal stimulus funding.
But, the money is not appropriated, much less delivered.
The good news is that it is only about 10% of our total budget, the bad news is that actually getting it is contingent on some additional budgeting.

Specifically, the State has a bill to legalise "table games" at casinos, where currently, I gather, only slots and other such games are allowed. Leading to our gamblers mostly handing their money over to New Jersey and tribal casinos in New York, or so I gather.

To balance the budget, and PA must have a balanced budget, more income is needed.
So, the state budget is contingent on this additional income, and only then can non-preferred funding, like PSU funding, be released.

So... they're projecting $200 million per year from the tax on table games.
This is from a combination of a 20% tax on gross revenue and an upfront license fee and renewal fee.

Huh?
So, the projection is a $billion per year gross from table games.
Hmm.

Well, unless you're a PhD physicist, or Tech undergrad, the house odds for a fair table game are roughly 2% - so to gross a billion, the turnover would need to be $50 billion per year - to sustain that revenue - they might pick up ~ $100 million excess in the first year from initial license fees.

But, but, but... the total Pennsylvania GDP is only about $500 billion.
The State budget is only $28 billion.
They are projecting 10% of the GDP will be spent on casino table games?
Twice the total state budget?

Ah, but the current machine games - slots etc - have a current gross revenue of $1.5 billion. So, why wouldn't the higher stakes, but maybe less popular table games gross a billion?
Well, because the house odds on machine games are more like 20%!
So the turnover on those is only $7-8 billion or so, or 1-2% of GDP.

Which just goes to prove that there are either a lot of very stupid or very desperate people out there.
At 20% house odds, gambling is stupid - there is no element of skill, and gambler's ruin is certain and quick for iterated games.
At least for table games skill play is possible in some cases, with positive expected earnings possible.
Althoough for a nearly broke gambler, stuck in the house, the correct strategy is a single long odds gamble - most of course bankrupt, but some small fraction score it big and can walk away with winnings.

Interesting model to base higher education funding on.

I do not speak in any way for the Pennsylvania State University, or any other state affiliated institution, unit or organization.
No criticism of current, past or future gamblers, gambling houses or their investors is implied, neither in Pennsylvania, New York, nor, especially, New Jersey.