Pennsylvania is picking up the pace in its push to make sports betting a reality inside the state. The PA Gaming Control Board has announced that, starting today, it will begin accepting applications for sportsbook platform providers, manufacturers and suppliers.
Interested parties can find the 59-page application on the state sports wagering licensure webpage.
The notice is the first sports wagering news to come out of PA since the state issued a new set of temporary regulations and requirements for those interested in operating sportsbooks late last month.
Who can apply?
Entities which can apply today are those that provide peripheral services to sports betting certificate holders. Certificates are only available to the state’s 12 land-based casinos (slot licensees), and were put up for grabs in May. By definition, those applying today include:
- Sports wagering operators: These are considered software platform providers, like William Hill and GVC. These are usually companies which are well-established in the sports betting world internationally, and partner with brick-and-mortar casinos to create online sportsbooks and sports wagering apps.
- Sports wagering manufacturers: Manufacturers are those which build, fabricate and assemble sports wagering devices or equipment, such as sports betting terminals located inside a casino’s sportsbook pavilion.
- Sports wagering supplier: Those denoted as suppliers are usually companies which provide services like geolocation verification or fraud protection. According to PA law, gamblers must be inside the borders of the state before they can place a bet at a Keystone State sportsbook or online gaming site, so solid geolocation software is a must.
Operators will be limited
Unlike in New Jersey, which will allow land-based casinos to partner with multiple operators to offer a total of three branded-sportsbook skins, PA has chosen to prohibit third-party branded sites completely.
The temporary regulations recently released contained text confirming the decision, stating that sports wagering will only be allowed “through a single interactive website or mobile application that clearly and prominently displays the name of the sports wagering certificate holder.”
This was something that was lobbied for by several casino operators, including Greenwood Gaming and Penn National. They contended that allowing skins would dilute PA casino brands and create a saturated marketplace.
This time, anti-skin proponents got their way, but were previously rebuffed when it came to online casinos. State online gambling operators, in contrast, will be allowed to offer unlimited skins, a concession even more broad than the one in New Jersey, although not one without its own set of limitations.
Where are the certificate holders?
Even though industry-related companies can start applying today, we still don’t know which casinos have actually taken steps to secure a sportsbook license.
The state began accepting sportsbook certificate applications on May 31, but so far we have only heard crickets from the control board as to which, if any, casinos have decided to take the plunge.
Unlike New Jersey and Nevada, which tax sportsbook operators at a relatively sane rate, PA plans to bleed operators dry. Interested parties must pay an absurd $10 million licensing fee and contend with a crushing 41% effective tax rate on sports betting gross gaming revenue.
The framework has rightfully given casino owners pause, as they contemplate if it is even possible to turn a profit under the system.
Many of the larger casinos will likely grit their teeth and come along, but smaller venues may decide to pass on the opportunity. We do know that Churchill Downs is definitely planning to open a book in the state. The U.S. gaming giant recently agreed to purchase Presque Isle Downs & Casino, where it announced that it will offer online gambling and sports wagering through a partnership with SBTech.
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