Pennsylvania Badly Needs A Sports Betting Intervention

Written By Grant Lucas | Last Updated
Pennsylvania Sports Betting

Everyone has a Chad in their friend group.

Chad, always one to impress with how he met one of Drake’s security personnel at the club last night, albeit met with a tinge of skepticism from the group.

Always continuing to one-up stories by making his case with ridiculous claims of now having an in for a party with Drake, now met with eye rolls and scoffs.

Pennsylvania is the Chad for legalized sports betting.

Always one to impress

At one time, the Keystone State was considered one of the odds-on favorites to first introduce regulated single-game wagering outside of Nevada.

While New Jersey was carrying the load in the US Supreme Court case, Pennsylvania lawmakers in October 2017 passed a gaming expansion bill that included legalizing PA sports betting. On May 14, SCOTUS ruled in New Jersey’s favor, striking down the Professional and Amateur Sports Protection Act to clear the way for regulated wagering.

Now, more than a month later, like a mourner at a wake, PA is on the outside looking in. Although really, Pennsylvania might as well be in the casket. And with the rope in the study, it was the state’s lawmakers that put it there.

It was that group that decided to get all Ottoman Empire on a still-unborn industry by proposing a head-spinning 36 percent tax – 34 percent to the state, 2 percent to local coffers – on gross sports betting revenue. Yes, that is in fact gross. That rate is on top of an up-front $10 million fee just for properties to obtain a sports betting license.

Always making a case

If casino and sportsbook operators were hesitant with just the tax rate – which would stand as the highest rate in any jurisdiction in the world – they’re folding their cards at $10 million before even seeing the flop.

Hollywood Casino spokesman Eric Schippers told Penn Live in May that Pennsylvania “has strangled the goose on this one.”

The state has done more than that, as it has plucked the feathers and started preheating the Traeger – all while trying to call the bluff of potential licensees.

“I think they will all participate and would be shocked if they didn’t,” Pennsylvania Rep. Robert Matzie told the Pittsburgh Post-Gazette earlier this month. “In sports-crazy Pittsburgh and sports-crazy Philadelphia, you’re going to see it bring a lot more people into the casino, watching the big-screen TVs, and when they get those people in the door to bet they’ll also hopefully drop money at the tables or in the slots.”

Always standing steadfast, driving himself out of the group

The state has not wavered from its proposed regulations, which the PA Gaming Control Board published last month. Pennsylvania, though, is welcoming public comments on said regulations.

And in a twist, it has been one of the very sports leagues that took New Jersey to court over PASPA, one of the same leagues that were laughed and shouted out of the room when meeting with Jersey lawmakers for possible integrity fees, that are speaking out on the state’s rates and fees. (For perspective, neighboring New Jersey will tax in-person revenue at 8.5 percent at casinos and racetracks, online casino revenue at 13 percent and online track revenue at 14.25 percent; Nevada has a 5-percent tax rate.)

In a letter from the NFL: “Finally, we would like to share our concerns that the statutory operator licensing fees of $10 million and the 34 percent tax rate on gaming revenue may render legal market participants unable to effectively compete with those in the illegal market.”

Granted, many of the other leagues and teams chimed in for integrity fees, more universal regulation or for outright prohibition of sports betting. Still, when the NFL – sitting on its throne while the Jeff Rosses of the world roast it – provides some insight into PA’s ridiculousness, that should be cause for concern.

Nothing is set in stone just yet for Pennsylvania sports betting. In fact, it does not appear anything will be until later this year or even into 2019.

Chad is not one to tell your group of friends that he has been wrong. But perhaps an intervention from that group – the leagues, casinos, track operators, and sportsbooks – can set Chad straight.