In theory, when online and mobile sports betting get up and running in Pennsylvania — possibly in a mere matter of days — there will no longer be any need for residents of the Keystone State to drive across the state line to get their bets down in New Jersey.
That assumes, however, that all of the same offerings in Jersey are available in PA. And that would be an inaccurate assumption.
Some of the differences are minor and will be perceived as inconsequential to most bettors, but the laws surrounding sports betting in the two neighboring states do indeed diverge in spots and could lead to slightly different products and consumer options.
Here are five of those discrepancies:
Taxes and licensing fees far higher in PA
In New Jersey, a sports betting license costs $100k, and gross revenue is taxed at 8.5% for brick-and-mortar wagering and 13% online, plus there’s a 1.25% local share tax.
In Pennsylvania (buckle your seatbelts if you haven’t seen these numbers before), the licensing fee is $10 mm, and there’s a 34% tax on gross revenue, plus a 2% local share tax and a 0.25% federal excise tax on handle.
It’s plain to see that the profit margins will be much tighter in Pennsylvania. Some sportsbooks are bound to stay in the red for a while, with operators hoping they make up for it by driving business to other parts of the casino, whether live or online.
Will this impact the customer experience? Not necessarily. So far, with brick-and-mortar books up and running at eight locations in Pennsylvania, the betting lines and juice appear comparable to what New Jersey bettors are finding.
More online sites in NJ
While the number of brick-and-mortar sports betting options figure to be similar in the two states (though more spread out in Pennsylvania, as compared to eight of New Jersey’s 10 being found in Atlantic City), NJ regulations allow for far more public-facing online/mobile sites.
Each of the nine AC casinos, three active racetracks, and two former racetracks are entitled to up to three “skins,” so NJ could potentially end up with 42 sports betting sites/apps. There are currently 13, and insiders estimate the total will settle in the low 20s.
In Pennsylvania, each land-based operator gets one mobile site. So there will not be 20-plus options for bettors to shop around at. The number might or might not reach double-digits. And for the foreseeable future, it appears it won’t include DraftKings, currently the No. 2 online sportsbook in New Jersey.
There is an interesting twist in that Pennsylvania has allowed two casino companies that don’t have casinos in the state, MGM and Golden Nugget, to operate online. This only applies to online casino, not sports betting, but it’s worth keeping an eye on whether an amendment to that law is pursued. (Then again, based on how MGM and GN’s digital sportsbooks are performing in NJ, they seem unlikely to shake up the PA hierarchy too much.)
Non-athletic-event betting not allowed in PA
In New Jersey, bettors were able to put money on the Academy Awards (to the tune of a mere $750k in handle, however, as part of a weak February for sports wagering) and last week’s NFL Draft.
In Pennsylvania, such events were off limits. In PA’s Act 42, passed in 2017, sports wagering is defined as “the business of accepting wagers on sporting events or on the individual performance statistics of athletes in a sporting event.” And a sporting event is defined as “a professional or collegiate sports or athletic event or a motor race event.”
Aside from the fiery debates sure to ensue among NASCAR fans over their sport being singled out as not necessarily athletic, the key takeaway here is that drafts and awards shows, or such things as the length of the national anthem at the Super Bowl, are decidedly not athletic events, and are therefore not available for betting in the Keystone State.
Penn Bets asked a representative of the Pennsylvania Gaming Control Board whether this wording might be adjusted in the near future if there is enough expressed interest from operators or consumers, and the response was that we “should not anticipate” such a change.
(New Jersey, meanwhile, launched sports betting post-PASPA in 2018 with what it called “emergency rules,” with an eye on getting the vertical up and running, while leaving the door open for the specifics to be tweaked with minimal difficulty moving forward.)
In-state college-team betting allowed in PA
One of the peculiarities of New Jersey’s sports betting law is that, while you can bet on most college games, two types of games are off-limits: those that take place in the state, and those that involve teams based in the state.
So you can’t bet on Rutgers football. You can’t bet on Seton Hall basketball. And if a portion of the March Madness bracket is taking place at, say, the Meadowlands, you can’t bet on any of those games, regardless of whether the teams involved are from Jersey.
In Pennsylvania, there’s no such restriction. Penn State football, Villanova basketball — it’s all fair game. And of course, PA books will welcome New Jerseyans who want to drive across the border to get a quick Rutgers or Seton Hall bet down.
PA has built-in competition (sort of) from the lottery
This is probably going to prove irrelevant to most sports bettors, but for the more casual participants who love the action as much as the challenge of making smart, winning bets, the PA Lottery is offering a sports betting game of sorts that could provide competition for the licensed sportsbooks.
Xpress Sports, which launched in Pennsylvania in August 2018, is a game in which users bet on simulated sports. It’s basically like if you chose to bet on between-innings Jumbotron games at the ballpark. It’s not really sports betting. But it might provide a similar sweat/rush for some.
The prediction here is that it won’t cut into the PA licensed sportsbooks’ bottom line in any meaningful way. But it is a theoretical competitor allowed by law that the NJ books don’t have to worry about.
Other assorted differences
- New Jersey is considering a maximum bet amount, whereas Pennsylvania has no such rules in the works. But given that NJ is looking at a bet ceiling of $5 mm, and that all operators run big bets up the chain of command before approving them anyway, this is probably of little consequence.
- The PGCB has proven to be much more conservative in many regards than the NJ DGE, which is willing to go on the offense (no surprise, since New Jersey was the state that challenged PASPA in the first place). For evidence, look no further than Major League Baseball’s request that the sportsbooks not offer betting on spring training games. NJ denied the request; PA sportsbooks took the games down.
- Although it’s unclear whether Pennsylvania will ultimately have more brick-and-mortar sportsbooks than New Jersey, PA figures to have more land-based betting locations because the state is allowing sports betting kiosks at mini-casinos that don’t have full sportsbooks.
- The speed of licensing is proving to be quite different. In New Jersey, while the licensure period tends to be drawn out, the state hands out “transactional waivers” that allow betting firms to offer gaming in the state while the license application is pending. (The waivers have to be re-upped every six months.) In Pennsylvania, if it drags out, it drags out. (And more often than not, it drags out.)
Photo by Shutterstock.com