Pennsylvania constantly embraces gambling
Gambling has long been a solid source of revenue for the government in Pennsylvania. The state is a leader in adopting expansionary policies for gambling.
Pennsylvania’s casino sector is second only to Nevada in annual gaming revenues. Since it started in 1971, the state lottery has raised over $28bn (£21.6bn) for programs helping elderly people in the state.
In recent years, the state has been accelerating gambling expansion even more. In October 2017, most forms of online gambling became legal.
After the federal sports betting ban was struck down in May 2018, Pennsylvania quickly passed a bill legalizing sports betting. It was the fourth state to do so.
Issues with state sports betting
Despite Pennsylvania being pro-gambling, some issues slowed the introduction of sports betting. One of them is the hefty tax rate on sports betting revenues. This rate is 36%, which is second only to Rhode Island as the highest in the country. Rhode Island imposes a 51% tax.
Pennsylvania also charges a hefty $10m (£7.7m) license fee for online gambling licenses. Operators were slow to apply for those licenses in the beginning, but the all-round online gambling licenses were popular.
The regulations for online gambling have been long in the works and Pennsylvania also took its time choosing technology partners to monitor the sector. Another delay was caused by the US Department of Justice (DOJ) changing its opinion on the Wire Act of 1961.
The DOJ decided that online gambling should not be allowed and Pennsylvania was waiting for this issue to clear up before rolling out online gambling.
Online sports betting finally here
States with online sports betting are thriving, while those with only physical sportsbooks are struggling to get anywhere near their revenue forecasts.
New Jersey is quickly catching up on Nevada as the leading state for sports betting. More than 80% of the sports bets made in New Jersey go through online sportsbooks. People are coming from out of state just so they can place sports bets through their mobile devices.
Some believe that online sports betting may begin in Pennsylvania at the very beginning of May. One of the casinos is going to do live testing of its new mobile sports betting apps. This is to ensure that there are no glaring problems.
One Pennsylvania operator is ahead of the pack and seems to be ready to launch their sportsbook any day now.
Sports betting revenues from the physical sportsbooks in the state have been okay to date, but probably not as good as expected. With gambling a popular pursuit in the state, many expect future revenues from sports betting to improve dramatically with mobile sportsbooks, as in New Jersey.
Some casinos in the state are operating mobile sportsbooks elsewhere. This gives them a leg up because they know what works and they can foresee potential teething problems that could arise upon launching.
The confirmation of a May date for launch came shortly after Pennsylvania Gaming Control Board spokesperson Doug Harbach spoke on the issue. The gaming board is communicating regularly with casinos set to open up mobile sportsbooks. There will be a 90-day review period of their software as per the state law.
Speaking about the imminent arrival of online sports betting, Harbach said: “Everyone’s excited (on the gaming board) about being at this point now, where these games that were approved well over a year ago by legislation are now on the precipice of beginning.”