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As the Commonwealth of Pennsylvania wrestles with budget and revenue shortfalls, a sports wagering tax hike is possible in 2026.
The Sports Betting Alliance (SBA) — which counts among its members major operators including DraftKings, FanDuel, BetMGM, Bet365 and Fanatics — is strongly opposing any move by state lawmakers to raise the tax rate on Pennsylvania online sportsbooks.
According to the group, any hike would undermine what they describe as a rapidly growing, yet fragile, industry.
Anti-tax advertisements
The context: Pennsylvania currently taxes online sports betting at 36% of gross gaming revenue. It’s already among the highest in the nation for competitive multi-operator markets.
Operators warn that raising the rate further would leave them few options: absorb the cost, reduce promotions, raise minimum bets or, most likely, pass the cost on to consumers. The SBA’s own campaign warns directly that “raising them even higher would hurt your betting experience, stifle innovation, and push players toward the illegal market.”
In a release timed with high-profile sports moments, the SBA ran anti-tax advertisements in both the Pittsburgh and Philadelphia markets, explicitly comparing an increased tax burden on sportsbooks to the pain consumers already feel from high grocery and gas prices.
They argue that a heavier tax load will simply become a hidden surcharge for bettors. It’s already a message backed by referenced precedent in states such as Illinois, where passing on extra tax costs has already happened.
From the industry’s perspective, the timing is critical. Pennsylvania’s wagering market has grown into a major contributor: last fiscal year the industry generated nearly $3 billion in revenue and paid roughly $1.3 billion in taxes, according to the Pennsylvania Gaming Control Board (and SBA‐cited figures).
Preparing for a potential tax hike
Against this backdrop, industry operators are not waiting for formal legislation, they are actively organizing politically. Reports indicate that a super-PAC is being funded with an initial $10 million in preparation for the 2026 mid-term elections, to influence tax and regulatory outcomes.
On the other side of the ledger, Pennsylvania’s budgetary situation provides the impetus for lawmakers to explore all revenue-raising options. But the operators’ message is clear: raising the tax rate further risks undermining a regulated market that has already absorbed heavy taxation, and could drive business into black-market alternatives.
As the SBA puts it: “With unfair tax hikes like this, everyone loses — but especially the customers.”
What a tax hike could mean for bettors
For bettors in the Keystone State, the debate is not abstract. If the tax rate rises, they may well face fewer promos, higher minimum bets or steeper fees embedded in the odds.
The industry contends that maintaining competitive pricing and promotional value requires stability in the tax regime — a position worth following as Harrisburg deliberates its next move.
