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Pennsylvania lawmakers are kicking around the idea of raising sports wagering taxes in the Keystone State, which already sit at 36%.
Should it happen, it’s also likely that a fee could trickle down to sports bettors in Pennsylvania.
Pennsylvania would not be the first state to increase sports wagering taxes. New Jersey raised its rate from 13% to 19.75% and Illinois went from a flat 15% to a progressive tax rate ranging from 20% to 40%.
Sports bettors in Illinois are responsible for paying an excise tax because of the hike. It could be similar for the Pennsylvania sports betting market.
Tax to fall on bettors
The 36% rate that Pennsylvania taxes operators is the second-highest in the US behind New York’s 51%. Compare that to the 10% tax rate that Missouri sports betting, the newest state to launch online sports betting, will levy on its operators, and it’s clear that Pennsylvania is moving in the opposite direction.
If lawmakers decide to raise the rate in the Keystone State, bettors will be the ones fitting the bill. A source told Legal Sports Report:
“Sportsbooks will have no choice but to pass on a tax increase in Pennsylvania to customers. iGaming is already the highest in the nation, sports betting is the second highest for competitive markets – leaving regulated legal sports books with few options.
“Just like in Illinois, customers will be the ones who bear the brunt if a tax increase comes to pass. All sportsbooks in Illinois were forced to make their products more expensive for customers after the new Illinois tax went into effect. Unfortunately, you would absolutely see that same situation would play out again in Pennsylvania.”
There hasn’t been a concrete number reported, either. However, a bill could arise during the 2026 session to get the ball rolling.
What Illinois’ excise tax looks like
As Illinois changed its tax structure from the flat fee to a tiered structure, the state also imposed a per-wager excise tax on sports betting operators:
- $0.25 per wager for the first 20 million online sports bets accepted annually by a sportsbook operator.
- $0.50 per wager for any wagers exceeding that 20 million mark within the same fiscal year.
Some operators have passed the tax entirely to customers as a separate “transaction fee,” while others raised their minimum bet requirements.
It remains to be seen what happens in Pennsylvania. If lawmakers decide to raise taxes, the Keystone State has a blueprint in Illinois to follow, and just like in the Land of Lincoln, it’s players who will pay the price.
