Ultimate Guide to Sports Betting in Pennsylvania – Legality and Preview

For more than 25 years, the federal ban on sports wagering, PASPA, ensured that the sports betting industry was mostly relegated to Nevada.

That all changed in May 2018, when the US Supreme Court ruled on Murphy v. NCAA, concluding that PASPA was unconstitutional and ripping it off the books.

This historic decision effectively grants individual states the power to legalize sports betting. And Pennsylvania stands to be one of the first states to take advantage, having already passed legislation which will allow the state’s brick-and-mortar casinos to offer both live and online sports betting to their patrons.

Here’s what you need to know about the current legality of sports betting in the Keystone State, and the future of the industry in the state.

PA sportsbook licensees

Neither live nor online sportsbooks have yet gone live in the state, however, PA casinos are currently in the process of applying for licenses.  Here are those who have submitted applications:

Penn NationalPenn NationalWilliam HillGrantville8/17/2018
Parx CasinoGreenwood GamingGANBensalem8/27/2018
South Philly Turf ClubGreenwood GamingGANPhiladelphia8/27/2018
Harrah's PhiladelphiaHarrah's PhiladelphiaScientific GamesChester9/25/2018
SugarHouse CasinoRush Street GamingTBAPhiladelphia9/26/2018
Rivers CasinoRush Street GamingTBAPittsburgh9/28/2018

Victory for sports wagering

New Jersey takes action

Since 1992, the Professional and Amateur Sports Protection Act banned all sports betting in most of the United States. New Jersey was given a short window in which to pass its own sports betting legislation in order to be grandfathered as an exception like Nevada, but Garden State lawmakers couldn’t come to an agreement on a bill in time, essentially shutting NJ out of what could have been a very lucrative industry.

Realizing its missed opportunity, NJ passed the Sports Wagering Act in 2012 to allow sports betting at licensed New Jersey casinos and racetracks despite the overarching PASPA prohibition. Five sports leagues subsequently sued to stop them, so then Governor Chris Christie brought a case before the US Supreme Court to argue that PASPA violates states’ rights under the 10th amendment.

Oral arguments were heard in December 2017, with the justices appearing open to New Jersey’s perspective. On May 14, 2018 a decision was handed down that PASPA violated the “anti-commandeering” principle and as such was struck down as unconstitutional.

As a result New Jersey finally overcame this obstacle to join Nevada in sports betting, needing only to finalize its own specific regulations to begin allowing sportsbook licenses.

Results for other states

Initially there was some concern that SCOTUS could choose a partial decision which would leave parts of PASPA in place and only allow sports wagering for New Jersey. In this outcome each other state would then be responsible for a lengthier process of fighting their own legal battle in the same vein.

Fortunately, Murphy v. NCAA resulted in the complete negation of the law. This leaves the rest of the country in a relatively much easier position to self-regulate on a state level, at least until Congress potentially passes a new Federal law.

Pennsylvania’s sports betting law and framework

Pennsylvania has not dallied on the prospect of legalizing sports betting within its borders. Last year, lawmakers passed an expansive gambling package which, apart from regulating online gambling, includes an option for the state’s casinos to open their own sportsbooks, once New Jersey prevailed in its case.

As the law stands now all of the state’s licensed casinos are eligible to take wagers on sporting events, although the exact minutiae of how such gambling will function still needs to be determined. The legislature has set no official timeline for when operations will begin, but a long delay is not expected.

Huge taxes and fees will test profitability

Since PASPA has been overturned, PA slot licensees have the opportunity to offer single-game sports wagering both live and through Internet sites, but not every operator might choose to do so. Running sports betting may come at a huge price in terms of fees and taxes, and this will likely cause some venues to opt out due to concerns over profitability.

To get up and running, venues will need to pay the following:

  • $10 million licensing fee
  • 34% tax on gross gaming revenue
  • 2% local share assessment tax
  • .25% federal excise tax on handle

In total, sportsbooks will be giving back around 41% of their profits, a huge chunk for a vertical known for razor-thin margins.

For comparison, New Jersey’s currently plans to impose much more reasonable taxes on revenues. The most recent bill stipulates:

  • 8.5% on gross gaming revenues for bets made in-person at a physical sportsbook
  • 13% on gross gaming revenues for online and mobile wagers
  • 1.25% local share
  • $100,000 per license

What’s more, professional sports leagues are asking for a so-called “integrity fee”, which would require operators to hand over a small percentage of their entire handle (up to 1%) to the leagues. These fees would likely equate to as much as 20% of revenue and could potentially put the nail in the coffin of the industry altogether, as the profitability would be reduced for operators below what is necessary to make the venture worthwhile.

Luckily the introduction of an integrity fee is an unlikely scenario, as PA passed its legislation before they became a hot topic. Not to mention, leagues probably chose the 1% on handle as a starting point for negotiation. While it is true that Congress could implement legislation that would require these fees there has been no motion on this yet, which leaves the states to decide themselves what is appropriate.

Already we’re seeing other states introduce more reasonable integrity fees, such as New York, which proposed a fee of 0.25% on handle.

Shortsighted money grab could have long-term consequences

PA sportsbook fees are undoubtedly massive, but come as no surprise in a state where lawmakers routinely squeeze casinos for the most cash possible.

Indeed, we need look no further than the state’s forthcoming online casino industry to watch the unprecedented money grab in progress. Brick-and-mortar casinos that wish to open their own online sites will be charged a $10 million fee to offer a full suite of gambling games (or $4 million per game type), and must pay an outrageous 54% tax on slot machine revenue.

The shortsighted approach could have the opposite intended effect, hampering both the sports betting and iGaming industries before they can get off the ground. While it is true that the state can still adjust these numbers it would require a major legislative push.

The likely unfortunate result will be that sportsbooks will need to run tighter operations and pass fees off to the gamblers, which will make legal betting less appealing than going through offshore betting, local bookmakers, or neighboring New Jersey.

How big will the PA sports betting market be?

Until now the few legal options available have led many Americans have taken their business to unregulated, offshore online sportsbooks.

In this lose-lose scenario, gamblers have risked losing their money through fraud, while the state missed out on what could be substantial tax revenue. Indeed, some estimates put the sports betting black-market in the range of $150-$400 billion.

Pennsylvania’s legalization of sports betting is a step in the right direction, although its high taxes and fees might keep the market from reaching its full potential.

At any rate, a recent report by Gambling Compliance estimates that the PA sports wagering market could be worth as much as $400 million per year. This figure is higher than any of the other states expected to most first with sports betting, now that the Supreme Court has struck down PASPA.

Online betting would likely make up the lion share of the sum, which, according to our projections, could be as much as 81% of the total.

Sports wagering bigger than online casinos?

The opportunity for sportsbooks could very well be larger than the state’s forthcoming online casino industry.

New Jersey has a population of 9 million, and banked $245.6 million in iGaming revenue in 2017. PA boasts three million more residents than its neighbor, and could potentially rake in upwards of $350 million, still $50 million less than projected estimates for sports betting.

At this early stage, there are still too many unknowns to predict with any certainty how much revenue PA sports wagering might bring in. But with Pennsylvania’s large population of passionate sports fans, it’s clear that the industry could thrive in the state.

Pennsylvania sports betting: FAQ

When will I be able to bet on sports in Pennsylvania?

With PASPA fully repealed, we should see sportsbooks opening up shop in the state later this year. The Pennsylvania Gaming Control Board has indicated it is reviewing the SCOTUS decision, but has not given an official timetable for launch.

It has, however, already passed the first set of temporary regulations, and indicated that it would like to start accepting applications for betting licenses and certificates in June 2018.

What is the current legal status:

The state’s recent expanded gambling bill (HB 271) allows potentially any of the state’s 12 licensed slots casinos may open their own books.

According to the law:

“The board may authorize a slot machine licensee to conduct sports wagering and to operate a system of wagering associated with the conduct of sports wagering at the slot machine licensee’s licensed facility… or through an Internet-based system.”

There is even a provision in the bill that permits license holders to open up temporary facilities, presumably to help expedite the rollout.

Where in Pennsylvania will gamblers be able to wager on sports:

Any of the following operators could apply:

A thirteenth casino, Live! Casino and Hotel Philadelphia, is in the works and likely would be able to offer sports betting right out of the gate.

What will the best locations probably be?

The casinos in Philadelphia are particularly well-positioned thanks to their proximity to the Wells Fargo Center, Lincoln Financial Field and Citizens Bank Park, the state’s sports epicenter.

These operators will most likely be the biggest benefactors when and if sports betting goes live. This includes SugarHouse Casino, Harrah’s Philadelphia and the soon to be constructed Live! Hotel & Casino Philadelphia. The prospect of legalized sports betting is especially mouthwatering for Live!, which will be built only a short walking distance from the three sports venues.

Fans streaming into the area on game day will be hungry to bet on their favorite teams, and could provide a big boost to the casino’s bottom line.

What about online and/or mobile sports betting?

Players will also be able to wager on sports in a much more convenient way, via online betting portals and mobile apps. The ease of betting from the comfort of home, or on-the-go through a mobile device, will likely make Internet wagering a much bigger opportunity for PA casinos.

Who will be eligible to bet on sports in Pennsylvania?

Most likely anyone who can currently participate in any other form of legal gambling in the state, namely all individuals who are at least 21 years of age except those who placed themselves on a self-exclusion list. For online and mobile activity the only additional requirement would be registering an account with a licensed casino operator and being within the state’s physical borders.

What types of sports betting will be supported?

The state has indicated that a full range of wagers will be allowed, with likely the most activity expected on single-game outcomes. The temp regulations have indicated that the following bet types will be available, among others:

  • Exchange wagering
  • Parlays
  • Over-under
  • Money line
  • Pools
  • Straight bets

Further specifics are still being determined by the PGCB.

How much sports betting revenue could be generated in the state?

Detailed analysis is still forthcoming with possible expectations varying wildly. New Jersey is hoping to see revenues of near $298 million per an estimate by Gambling Compliance. With a population 42% larger Pennsylvania could possibly see more than $420 million in the same period if it did not have such a terrible tax structure.

On the even more optimistic side of things, Nevada saw record revenues last year of nearly $249 million, with a population less than a quarter of the Keystone state. Granted the Nevada market has the advantage of many more years of experience, but with time if the sports-loving Pennsylvania avoids being hobbled by excessive taxes and fees it would not be impossible for sports wagering to someday become a billion dollar a year industry.


PA gamblers and sports fanatics unfortunately do not currently have the ability to legally place bets on their favorite competitive events. However, since the US Supreme Court has ruled in favor of New Jersey in the landmark Murphy v. NCAA case, they will now be able to do so sooner rather than later.

The next step will be the PGCB cementing specific regulations and casinos establishing their betting operations. The larger slot operators are expected to do so, especially those in proximity to the Philadelphia area sports venues. The development of online options is also in the works.

PA is eager to capture some of the revenue being sent to offshore sportsbooks and already has a legal and regulatory framework in place. Soon we will see Keystone State casinos offering a full menu of sports betting options. While a handful of other states may beat PA to the punch, establishing a solid sports book environment quickly will be beneficial to the industry thriving.

But can the state’s casinos compete in the face of exceptionally high fees and taxes? There are no doubt throngs of Pennsylvanians eager to start making sports wagers, but the financial burdens and low profit margins inherent to the industry may be too much for many to overcome.

By overreaching, PA lawmakers may very well have shot themselves in the foot, creating an unsustainable environment for what otherwise could be an exceptionally lucrative industry.

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