Here is a short history lesson – don’t worry it won’t take long! The battle to make PA Online Sports Betting legal and in the other States did not happen overnight. It took a while to sort out.
The ban on online sports betting in the USA was officially lifted on May 18, 2018, after the Supreme Court of the United States lifted the suspension that was imposed after the major leagues of NBA, NFL, NCAA, NHL, and MLB fought for sports betting to be illegal by citing the Professional and Amateur Sports Protection Act (PASPA) to prohibit state-regulated sports betting.
The Supreme Court of the United States decided in favor of the state of New Jersey with a 6-3 majority decision. This allowed States are now allowed to decide whether or not to make online sports betting legal in their State. Pennsylvania was one of the first States to pass a law that authorized sports betting. They also now allow online sports betting since the bill was passed. They launched online sports betting in Pennsylvania on May 31 2019.
Driven by the opinion in the landmark sports betting case, Murphy vs. NCAA in May of 2018, Pennsylvania has recently approved sports gambling action and more recently begun allowing online wagers. Pennsylvania does not have a reputation for being a large gambling state, but they do allow many different types of wagering. Legalization of sports betting has invigorated the gambling market in the state, with revenues already increasing rapidly in the first year of sports wagering operations, and with the NFL season right around the corner, big things are in store for Pennsylvania bettors and operators.
It is currently legal to gamble in Pennsylvania. Types of gambling currently permitted in Pennsylvania include table games, sports betting, online casino, horse racing, off-track betting, lotteries, as well as social and charity gambling.
Legal, in-state online wagering was introduced in Pennsylvania in 2019. Any online gambling operators must apply within the Pennsylvania Gaming Control Board (PGBC). PA sports betting licenses cost $10 million apiece. PA online sports betting operators currently face the steepest barriers to entry of any state that currently allows sports wagering.
Gambling in Pennsylvania has roots back to the mid-1900s when horse racing was first legalized in 1959. The PA state lottery was instituted in 1971, with its purpose stated, “to provide property tax relief to the elderly for property taxes paid in 1971 and thereafter to persons 65 years of age or older.” The lottery was also implemented in order to hopefully limit illegal gambling syndicates operating within the state.
Beginning in 2004, Pennsylvania has progressively pushed more and more gambling legislation through with the hope that additional gambling venues would create an abundance of new jobs and generate additional revenue for the state. This state-wise interest in gambling has gained steam recently and has come to a crescendo, with the state reporting record revenue of $3.2 billion from PA casinos in 2017.
Future of Sports Betting in PA
The future is somewhat murky for sports betting in PA. The main reason for this is the incredibly tough barriers for operators to enter their market.
Operators must pay a $10 million up-front fee in order to operate, as well as pay the state 36% in taxes for all revenue from PA online sports betting.
This is currently by far the strictest tax rate levied on operators in any state to pass sports betting legislation. Since the PA online sports betting market is still in its nascent stages, it is so far unseen how this will ultimately affect the consumers.
However, the ultimate belief is that the digital realm is where the market will truly thrive in the near future, and PA has allowed this in their legislation. This movement is a great conduit for live/in-game wagering, which is widely believed to be the future of PA sports betting.
Combining the excitement with the ability to wager on what is unfolding in front of you either while at a sporting event or on your coach, with instant payouts, is a very enticing product.
Following in the European market trends, they are roughly 70% live betting, and 30% pre-game betting – the PA sport betting market is currently inverse.
Pennsylvania installing legislation to allow online/mobile wagering is a large win for consumers, as other states have not been as forward-looking.
Other states not including mobile wagering in their legislation is largely politically motivated, to ensure that their political contacts (who donate to their campaigns) who are owners of brick-and-mortar casinos have the time and bandwidth to get up to speed with the online providers.