West Virginia A Big Favorite To Have Legal Sports Betting Before Neighboring Pennsylvania

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Pennsylvania regulators need to get on the ball.

Whenever the Keystone State finally goes live with legal sports betting, it will be trying to catch up with not one, not two, but three neighboring states.

This was confirmed on Wednesday, when West Virginia — a state doing everything it can to siphon off gaming revenues from parts of PA — announced that the state’s Lottery Commission had approved the proposed sports betting regulations, setting the stage for a launch prior to the first NFL games. Casinos and racetracks in both Delaware and New Jersey have both already begun taking bets.

What’s in the WV regulations?

The West Virginia regulations contained, among other things, the following:

  • Three skins per casino
  • Skins must conspicuously display the name of the casino under which they hold a license on both their website and mobile app
  • No in-person registration required for online betting
  • Temporary facilities can take bets for up to 90 days

As per the law that legalized sports betting in WV, casinos will pay $100,000 up front for a sports betting license and be subject to a 10% tax on gross gaming revenue.

And with that, West Virginia expects to have sports betting up and running within the next couple months.

An unforced error by PA

It didn’t have to go down this way for Pennsylvania. While it was always likely New Jersey and Delaware would be the first to go live once the Supreme Court opened the door for sports betting outside of Nevada, West Virginia was never in that same boat.

The Mountain State has five casinos, three of which are within easy driving distance of Pennsylvania. And they will be gunning hard for Pennsylvanians in the early months, particularly in the increasingly likely scenario that Pennsylvania is not ready to go in the fall, when football starts.

But Pennsylvania, which passed its law several months before West Virginia, has failed to make progress at the same rate as its neighbor to the south.

Politicians and regulators can only blame themselves.

Will they even pay?

Herein lies the problem. It’s just too expensive.

A $10 million license fee — and approximate 41% tax rate on gross revenue — will cause some venues to swipe left on the endeavor altogether. It’s not a matter of if, but how many.

And this speaks to some greater concerns about the gambling law passed last Fall.

The addition of satellite casinos, which already brought in more than $125 million for the state, must be looked at as a success. And so far the online lottery looks promising.

But enthusiasm is tepid at best about online poker and casinos. Given more than two months have passed since the door opened for interactive gaming license applications, and to our knowledge not a single application has been processed, it feels like time to start worrying.

And that brings us back to sports betting.

Temporary regulations were approved on May 30, and the following day the application process was opened. But as of June 4, there had been no movement, and if there’s been any since, it’s still under the radar.

Could we be looking at a situation similar to online casinos, where months pass without a single application coming in? Given the up-front costs, it’s hard to blame casinos for taking some time to weigh the pros and cons.

Will WV be able to take advantage?

West Virginia sports books will be operating under much more desirable conditions than their Pennsylvania counterparts, and may be able to take advantage of that to gain an edge on numerous potential customers who live close to the interstate border. If Pennsylvania casinos are unable to offer the same betting odds as West Virginia, many Pennsylvanians will likely make that trek.

WV sports books should be open by sometime in August, giving them what will almost certainly be a multi-month advantage over PA. That, coupled with the structural advantages in the state’s law, could help bring in a considerable number of customers who might otherwise have stayed in their home state.

Maybe Pennsylvania will get it together and fast track their regulatory process, but if I had to bet, I’d say there will be plenty of Pennsylvania plates in the parking lots of Mountaineer, Hollywood, and Wheeling Island when Week 1 of NFL season comes around.

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Adam Small has been an entrepreneur in the online gambling space since 2004. He is a cofounder of PocketFives.com and owner of several businesses in the industry.

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