The gambling conglomerate, which also owns two PA satellite casino permits, will grit its teeth and pay the whopping $10 million startup fee, and contend with a skyhigh 36% tax rate on sports wagering gross gaming revenue.
The announcement comes on the heels of a report that Penn will soon begin taking sports wagers at three of its properties in Mississippi, one of the handful of states to have so far legalized the industry.
One is the loneliest number
While NJ casinos were chomping at the bit to secure their sports betting licenses once the industry was legalized, the eye-watering fees imposed in PA have given many operators pause. Indeed, the state began accepting license applications back in May, and has only just recently found its first taker.
In New Jersey, operators pay a relatively sane 8.5% tax to offer sports betting at land-based casinos, and a 13% rate on online and mobile revenue. Garden State racetracks pay a slightly higher, 14.25% rate to offer the vertical.
PA, on the other hand, intends to squeeze its casinos for all their worth, potentially making the traditionally low-margin vertical unprofitable altogether.
Even Churchill Downs, which proudly stated that it would definitely be offering sports betting in the state, has offered some resistance, commenting in a recent PGCB meeting that it would need to further assess the situation before moving forward.
Penn National splurges, bitterly
Penn National has put up resistance to nearly all aspects of the expanded gambling law which was passed last year – but to little effect. Ironically, it has now become the state’s biggest spender on gambling-related licenses this year, dropping $77,600,000.
First, the company lobbied against mini-casinos, which it believed would threaten its Hollywood Casino location. When that didn’t work, it decided to get aggressive, purchasing a satellite casino permit in Yoe for $50,100,000, more than $42 million over the minimum bid. But it didn’t stop there; it also snapped up the fifth mini-casino up for grabs in April, for a much more palatable $7,500,000, effectively building a wall around its flagship property.
Penn also tried to limit the number of online gambling skins which casinos would be allowed to offer to one per license holder. They lost that battle as well, with regulators deciding that operators could partner with an unlimited number of qualified third-party entities to offer iGaming.
Last month, we found out that Penn decided to go along anyway, ponying up $10 million for a license which gives them the right to offer online slots, table games and online poker.
The company had a bit more luck in its efforts to limit online/mobile sports betting skins. In recent temporary regulations, it was revealed that the PGCB would limit sports skins to one per certificate holder.
The next Gaming Control Board meeting is slated for September 12, meaning that sports betting won’t be up and running until at least the middle of NFL season.