Sports betting legalization in Pennsylvania
In 2018, the US Supreme Court struck down a federal ban on sports betting, leaving legalization at the state government level.
Since then, several states have quickly made sports betting legal in their territories. While most players are encouraged, many are unsure of their state's current legal climate.
The legalization of sports betting is of great concern to representatives of US sports leagues.There will be an increase in the number of fixed matches in the country, especially in college sports.
What about Pennsylvania? Is Pennsylvania sports betting possible and legal?
Legalization of Sports Betting in PA: A Background
Pennsylvania became the seventh US state to accept sports betting. The first sports bet was accepted on November 15 when Penn National Gaming tested their system with first-time players at the Hollywood Casino at the Penn National Race Course.
The next round of testing took place the next day next to the newly renovated Skybox Sports bar, with a full launch over the following days.
The research by Eilers & Krejcik Gaming estimates Pennsylvania's mature sports betting market to be worth twelve billion dollars annually, nearly three times that of Nevada.
Penn National has confirmed that it began processing sports betting at 3:00 pm local time, and the test run allows staff to get to grips with the new system and iron out issues that have been reported with the launch of sports betting in some other US states in recent months.
Hollywood Casino at Penn National Race Course and Parx Casino last month became the first casinos to receive approval from the Pennsylvania Gaming Review Board (PGCB) to begin offering sports betting.
Since then, Harrah's Philadelphia, Rivers Casino Pittsburgh, SugarHouse Casino and Valley Forge have also applied for sports betting licenses.
Any casinos that want to start betting in Pennsylvania must pay an initial license fee of $10 million, and sports betting income is taxed at a whopping 36 percent.
Pennsylvania follows Delaware, Mississippi, New Jersey, New Mexico and West Virginia in offering sports betting to its residents after the U.S. Supreme Court overturned PASPA in May this year. Previously, sports betting was only legal in Nevada.
PGCB is also currently developing applications for online gambling licenses in the state.
Some Stats on PA Betting
In 2019, the American Gaming Association conducted a study on sports betting consumer behavior. The results show that sports bettors increasingly prefer legal bookmakers over illegal operators when placing bets in PA.
About 48% of current sports bettors in the Keystone state where sports betting had been legalized by that time reported that regulation has increased the frequency of their bets.
Bettors from Pennsylvania also stated that safe betting is the most important factor for them considering the future of sports betting.
Last year, sports bettors in Pennsylvania noted:
- 12% increase in spending on online and mobile betting with legal operators
- 25% reduction in costs for illegal bookmakers
- 3% cost increase with offshore operators
The figures were based on interviews with more than 3,000 PA adults over 21 years old from various subgroups. The survey results highlighted the need for states to allow legal options to divert customers from unregulated and unsafe operators.
Among the key factors influencing the transition from the illegal to the legal market were:
- 25% — guarantee and confidence that bets will be paid
- 20% — awareness of legal alternatives
- 19% — prefer to use regulated bookmakers
Were it not for the confusion of players between legal and illegal gambling operators, the migration from the unregulated sports betting market would probably have been more significant.
While 74% of Pennsylvania sports bettors say it's important to only bet through legal entities, 52% of last year's bettors said they engaged in illegal sports betting activity in 2019.
Surprisingly, 55% of those surveyed said they placed the majority of their bets with illegal operators, stating that they believed they were betting legally. The results reinforced the need to educate sports bettors on how to bet legally and why.
Consider some more stats related to Pennsylvania betting on sports! You will be amazed!
During the state's first year of legalized sports betting, Pennsylvania recorded $84.1 million in 2019 betting revenue.
Total sports betting revenue reached $1.49 billion, with over 50% of the $43 million in revenue generated online since the launch of the first online sports book last May.
Taxes levied on sports betting totaled $30.3 million in 2019. Valley Forge Casino Resort had the highest sports betting revenue of $24.6 million.
While sports betting in December 2020 rose 8% from November 2021 to $342.6M, revenue on a monthly basis fell 23% to $11.4M, with more than 70% of bets generated online.
Total gaming and fantasy revenue grew 4% year-on-year in 2019, with total revenue of $3.41 billion, a record annual revenue for the state.
December total gaming revenue rose 3% to $291.9 million. Parx Casino brought in $52.1 million, the top-grossing casino last month.
Sports betting in Pennsylvania began in November 2018 and is now available at 12 locations and eight online betting sites, with an additional Hollywood Casino opening.
PA Sports Betting Legality Essence
This state has fast-tracked laws to legalize betting, but on such stricter terms that the market here is unlikely to be able to realize its full potential. The license here costs $10 million, and the tax rate is 36%. Since other states offer a more lenient environment for carriers, Pennsylvania's permit is more like a veiled ban.
In any relationship between the client and the company providing services, sooner or later disputes may arise that can only be resolved in a legal format. Players who are served in foreign betting shops are de facto deprived of such an opportunity, since it is almost impossible to reach the regulator's office, which is registered, say, in Cyprus.
Using the services of legal bookmakers in Pennsylvania, bettors receive local legal protection, thereby insuring themselves against unfair decisions, sanctions, account blocking, etc. It is because all of the betting and gambling services in the Keystone state are monitored and controlled by the Pennsylvania Gaming Control Board.
Sports Betting Legality in PA: Discussions
The main concern of opponents of the idea of PA legalizing sports betting operations is the risk of the spread of match-fixing and the boom in gambling addiction. Therefore, they try to minimize both the first and the second by providing for mandatory deductions in favor of sports teams and for the treatment of gambling addiction.
In addition, most states impose restrictions on the placement of ground-based teaching staff near social, medical, educational and religious institutions.
Mobile applications for PA gambling are no longer a breakthrough, this is the requirement of the time for the gambling industry, however, not all states are ready to allow them. It is believed that mobile and remote betting can contribute to the spread of gambling addiction.
Another important element of legislative regulation is the definition of the process of identifying players. The latter is necessary in order to protect minors from participating in sports betting operations.
For example, users in many states first need to visit a land-based sports betting shop, verify their identity, and only then will they be allowed to place bets via the Internet or mobile applications.
The most important controversial issue is the financial issue. On the one hand, the legalization of sports betting should bring significant income to US sports leagues, but so far negotiations with bookmakers on specific figures have not led to anything.
A number of sports clubs insist that bookmakers must pay them a certain percentage of their income. On the other hand, betting is not legal in all states, so some clubs run the risk of being left without additional profit.
Sports clubs from Pennsylvania, where the monopoly on sports betting is completely controlled by the state, will be especially affected by this.
Despite many bumps, the future of sports betting in the US looks very promising. This is also confirmed by studies by independent companies that report that the US gambling market is one of the most promising.
Further Steps and Impacts
All of these positive facts in the sports betting industry results in the news that the sportsbooks can get legal in Massachusetts. Sports betting in Massachusetts could be legal as early as 2022. The authorities of this state are making efforts to legalize betting in 2021.
In particular, state legislators have filed dozens of proposals to include sports betting revenue in Massachusetts' 2022 budget proposal. In parallel, representatives of the gambling industry are pushing for the creation of a regulated betting market in the state.
The PA sports betting industry is booming, demonstrating not only impressive financial results, but also the fact that legalization, based on the popularity of the industry, was one of the public needs.
At the same time, the state in its own way delimits the limits of what is permitted, fights challenges and calculates profits. Meanwhile, the winds of change carry on to fill the sails of the US sports betting industry.