Supreme Court Decision Clears Way for Legal Sports Betting in Pennsylvania

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Today the Supreme Court handed New Jersey a massive victory in a case which has wide-ranging implications for the sports betting industry across the US, and Pennsylvania in particular. Justices ruled by a 7-2 vote to strike down the Professional and Amateur Sports Protection Act (PASPA), a law which has essentially prohibited sports betting outside of Nevada for over 25 years.

The decision opens the door for all US states to independently legalize sports betting within their borders, and gives PA the green light to move forward with its own industry plans.

PA is locked and loaded

Pennsylvania, like several other states, has already prepared for a favorable outcome in today’s historic ruling. Last year, state lawmakers passed an expansive gambling package which included the option to authorize sports betting, should the Supreme Court strike down PASPA.

The same bill also legalized daily fantasy sports, and gave the state’s 12 land-based casinos the right to set up their own online gambling sites. This is an important point, as it will give operators the opportunity to offer sports wagering through Internet-connected devices and apps.

PA is one of just a handful of states which has passed legislation regulating sports betting, with nearby New Jersey and West Virginia also legalizing the activity.

When will PA sportsbooks get up and running?

Now that New Jersey has prevailed in its case, PA can start putting its sports betting plans into action. But before any bets can be made, the Keystone State will need to flesh out it sports betting bill and go through the process of licensing operators.

In New Jersey, some racetracks and casinos had already begun building their own sports books before the Supreme Court decision was handed down. Monmouth Park spent $1 million developing a dedicated lounge, while Borgata has pledged $7 million to building its own. All the other casinos and tracks will follow in their footsteps.

That means that, once a new bill is passed there, Garden State gamblers will be able to start betting on sports fairly quickly, likely before the start of this year’s NFL season.

Things may take a little longer in PA, which is less prepared than its eastern neighbor. Regulations still need to be cemented, and casinos will need to start building their own sportsbooks. There are however stipulations in the PA bill which allow for temporary facilities for books, which could speed things up. Online gaming sites are on the way, as is online sports wagering. However, we don’t expect to see virtual casinos launch until at least November.

PGCB spokesman Doug Harbach stated Monday that the agency is still reviewing the court’s decision, and does not yet have a timetable for the industry launch. With any luck though, Keystone State bettors will be able to place bets on the year’s first NFL matchup.

PA sports betting industry framework

Pennsylvania is already home to 12 physical casinos and offers lottery games at retail locations throughout the state. It was only natural that lawmakers include sports betting in the same gambling package which also allows for iGaming sites.

Specifically, the bill gives PA slot licensees the opportunity to offer a full range of sports betting including single-game wagering, the most popular variety of sports bet.

In light of today’s ruling, the preemptive move has paid off, and will make PA one of the first movers in the industry. However, interested operators will need to think long and hard about whether they will participate due to the outrageous fees which the state plans to levy.

Here are the particulars of the licensing and tax structure, according to the bill:

  • A $10 million licensing fee applies
  • Gross gaming revenue will be taxed at 34%
  • Additional local share assessment tax of 2%
  • .25% federal excise tax on handle (around 5% GGR effectively)

In total, operators will pay around 41% of their profits to the state, an eye-watering amount in a vertical which is known for thin margins.

Sports betting is a potentially big business though, especially in a state like PA, which has a vibrant sports community. Many operators will bite the bullet and pay the fees, hoping to take advantage of this new potential windfall, but smaller venues could balk.

Live!, a large casino and hotel complex set to be built in the next few years stands to gain in particular. Its planned location is right inside the sports epicenter of the state, within walking distance of Lincoln Financial, Citizens Bank Park and the Wells Fargo Center. Sports fans circulating through the area will be eager to place bets on their favorite teams and Live! will be there to accommodate.

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Bill Grinstead

Bill has over a decade of experience working in diverse aspects of the online gambling space. He is currently focused on legal, US online gaming, which he has reported on since the industry first became regulated in the country.

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