In May 2018, the US Supreme Court struck down the law that made sports betting illegal pretty much everywhere outside of Nevada. It also upheld a 2014 New Jersey law aimed at allowing sports betting in casinos and racetracks by a vote of 6-3, opening the door to legal and regulated sports betting all across the country.
Pennsylvania lawmakers passed sports betting legislation as part of a comprehensive gambling expansion plan approved in October 2017. The sports betting side of the law was simply awaiting a change in federal law. That change came May 14, 2018 with the Supreme Court’s decision.
State gaming regulators are now putting together the regulations that will govern the PA sports betting market. All signs point to that market officially opening up right before the leaves begin to change color.
Federal ban on sports betting lifted
Supreme Court Justice Samuel Alito said in the written decision that the federal ban on sports betting infringed upon state sovereignty and was unconstitutional. He said states should be able to make their own choices when it comes to sports gambling, and that’s exactly what Pennsylvania plans to do.
As one of just a handful of states that saw fit to legalize sports betting before the Supreme Court decision was released, it should be one of the first to open up a legal sports betting market. It’s simply a matter of the Pennsylvania Gaming Control Board (PGCB) having the time to design proper regulations for that market and set up the framework for legalized sports betting inside PA.
The board issued a statement once the Supreme Court decision was released, saying gaming board staff would begin drafting the appropriate regulations immediately before ultimately seeking the board’s approval of them.
No timetable has been set for completion and approval of the regulations. Nor has a date been set for the launch of sports betting in Pennsylvania. However, a 60-90 day timetable is considered reasonable, which would give the PGCB enough time to get legal and regulated sports betting up and running in PA before the 2018-2019 NFL season kicks off.
Of course, the state’s new sports betting law will be the foundation for the regulations created by PGCB.
PA sports betting
The law is clear on several fronts, including restricting sports betting to people 21 and up. It allows wagering on both professional and collegiate sporting events. And, under the law, players should be able to make these bets in person, online with a computer, or on a mobile device.
The law also dictates only licensed sportsbooks can take bets in the state.
PGCB is also responsible for issuing these licenses to qualified sports betting operations.
The law dictates that any slot machine license holder in the state can apply for what is called a Sports Wagering Certificate. Only the states 12 casinos and racinos, plus a 13th currently in development, hold slot machine licenses.
The Sports Wagering Certificate will allow casinos and racinos in the state to open up a sportsbook and start taking sports bets.
There 13 Pennsylvania casinos and racinos are:
- Harrah’s Philadelphia in Chester
- Hollywood Casino at Penn National Race Course in Grantville
- Lady Luck Casino Nemacolin in Farmington
- The Meadows Racetrack and Casino in North Strabane Township
- Mohegan Sun at Pocono Downs in Wilkes-Barre
- Mount Airy Casino Resort in Mt. Pocono
- Parx Casino and Racing in Bensalem
- Presque Isle Downs & Casino in Erie
- Rivers Casino in Pittsburgh
- Sands Casino Resort Bethlehem in Bethlehem
- SugarHouse Casino in Philadelphia
- Valley Forge Casino Resort in King of Prussia
- The currently in-development Stadium Casino in Philadelphia
Sports Wagering Certificates
The Sports Wagering Certificate will come with a $10 million one-time licensing fee attached. Thereafter, Sports Wagering Certificate holders will be responsible for forwarding 36 percent of all sports betting revenue to the state in taxes.
No other state that has sports betting, or is currently in the process of setting it up, has as high a tax rate. In fact, the state of Nevada charges sportsbooks only 6.5 percent in tax. In New Jersey, the state will charge sportsbooks only eight percent in tax when that market opens. Additionally, the state of West Virginia plans to tax its sports betting operations at a rate of 10 percent.
This could limit the size of the PA sports betting market. Particularly if operators pass on that tax burden to gamblers. If it makes financial sense to bet in neighboring states or continue to make wagers with illegal bookies, most gamblers will do that. Not only will that hurt the local business, bit ti could limit its size right from the outside, as casinos and racinos see a lack of potential to recoup licensing fees and decide not to apply for a Sports Wagering Certificate to begin with.
There are those hoping the state will decide to renegotiate the tax rate before the market opens up.
Frequently asked questions about PA sports betting gambling
Is sports gambling legal?
Yes, it is. Pennsylvania legalized sports betting in October 2017. The state still needed a change in federal law to see its sports betting law enacted. However, the US Supreme Court declared the Professional and Amateur Sports Protection Act (PASPA) unconstitutional in May 2018, bringing about the necessary change.
Who oversees sports gambling?
PGCB has regulatory jurisdiction over sports betting in PA. It is responsible for setting up regulations to govern sports gambling, issuing licenses to sports betting operators and overseeing all sports betting operations and activity.
Where can you bet on sports?
There are no sportsbooks open and ready to take bets in PA just yet, but they are coming.
PA’s new sports betting law will allow in-person, online, and mobile wagering at licensed sports betting operators.
Pennsylvania’s 13 casinos and racinos can apply for sports betting operators licenses. Approved applicants will be allowed to open up a temporary betting facility for up to 18 months as they construct permanent sportsbooks.
The regulations being put in place by PGCB should provide more information regarding online and mobile wagering. However, online sports betting will only be allowed from inside the state. Wagerers locations will be verified through IP address confirmation and geolocation.
Who can apply for a Sports Wagering Certificate?
The new sports betting law in the state only allows slot machine license holders to apply for Sports Wagering Certificates. These Sports Wagering Certificate allow holders to open up a sportsbook and take bets.
There are currently 12 PA casinos and racinos holding slot machine licenses. A 13th casino is still in development in Philadelphia but holds a valid slot machine license.
Who can bet on sports in PA?
Sports wagering in PA will only be open to people over the age of 21 who are located inside state lines at the time the bet is placed. Gamblers will not need to be PA residences. They just need to be in PA when they place a bet.
How much money will sports gambling generate?
It’s impossible to say how large the market will be for legal sports betting in PA.
There will certainly be significant competition from neighboring states. New York and New Jersey are both planning to open up legal and regulated sports betting markets of their own.
Additionally, the 36 percent tax in PA could limit the size of the market. Competitors paying fewer taxes could offer more value to PA gamblers, drawing them outside the state and hurting the local market substantially.
Sports betting law in PA
It has already been a few years since Pennsylvania started considering legal, regulated and taxed sports betting.
In 2015. Rep. Rick Kotik introduced legislation aimed at legalizing sports betting at PA casinos. Kotik saw the popularity of illegal sports betting in PA and touted the need to regulated and tax it.
Rep. Rob Matzie co-sponsored the bill and put together a resolution in December 2015 asking Congress to repeal the federal ban on sports betting. A move that would ultimately allow states to make their own decisions on sports betting.
The PA House passed the resolution in January 2016, but the bill really went no further.
In January 2017 Matzie introduced new sports betting legislation to the House. It was a follow-up to Kotik‘s original 2015 bill, but it went even further.
This bill changed the constitutional language involved and directed the PGCB to create regulations including rules and procedures for sports betting in PA.
The bill asked for a $5 million licensing fee from PA casinos and racinos interested in building sportsbooks. It also called for an 18 percent tax on sports betting revenue.
The bill got approval from the House Gaming Oversight Committee in April, but never went to vote in either branch of the PA legislature.
PA gambling expansion
Soon, PA began considering several different gambling expansion initiatives. This included online gambling, video gaming terminals, and online lottery sales.
Lawmakers started putting together comprehensive gambling expansion legislation for PA adding in all these measures.
It went back and forth between the House and Senate several times, with a reworking of Matzie’s sports betting legislation added to the sixth version of the bill.
The seventh version was ultimately passed by the legislature and signed into law by Gov. Tom Wolf on Oct. 30, 2017. It still included sports betting legislation pending a change in federal law,
That meant sports betting was officially legal in Pennsylvania, pending a change in federal law that came on May 14, 2018 when the Supreme Court ruled PASPA unconstitutional.