Many people in the Pennsylvania gaming industry are worried about the 36 percent tax rate on sports betting.
Susan Hensel is not one of them.
Hensel part of state sports betting regulation panel
The Pennsylvania Gaming Control Board (PGCB) Director of Licensing was part of a panel discussion at Global Gaming Expo in Las Vegas on Tuesday. The panel was called How States and Tribes Are Preparing for Legal Sports Betting. Joining Hensel in the discussion were:
- David Rebuck, Director, New Jersey Division of Gaming Enforcement
- Matthew Morgan, Director of Gaming Affairs, The Chickasaw Nation
- Chris Sylke, Vice President of Government Relations, American Gaming Association
Over the course of the hour-long discussion, topics ranged from integrity fees to the pros and cons of federal regulation. Hensel also gave some insight into the regulatory process in Pennsylvania.
During the question and answer portion of the panel, someone directly questioned Hensel on the wisdom of the hefty and unprecedented 36 percent tax rate. Her initial response was rather simple.
“Well, we have five applicants.”
Hensel also elaborated that generally, predictions about the Keystone State have not come to fruition. She pointed to the massive growth of the casino industry in the state despite what many deemed was an exceedingly high tax rate on slot games of 54 percent.
Last fiscal year, Pennsylvania casinos generated $3.2 billion in revenue. That puts them behind only Nevada in terms of the gaming marketplace.
PGCB in no rush to launch sports betting
As those following the issue know, Pennsylvania sports betting is still very much in flux. The board has adopted temporary regulations but still have not finalized them.
As Hensel noted, five PA casinos filed applications for sports betting licenses. Two are already approved, with the other three to likely get their hearing on Oct. 31. The application process is open-ended, so there is also potential for more to join the market as it matures.
Hensel acknowledged the process is taking a long time, especially in contrast with neighboring New Jersey. However, PGCB is not worried about rushing to market. According to Hensel, the focus is on getting sports betting right more than being first.
Integrity fees, different tax rates not major talking points
In that conversation about getting things right, Hensel did not mention whether or not PGCB was willing to reconsider tax rate or licensing fees. Instead, she stood by the fees and instead focused on other areas of regulation:
- Evaluating suitability of operators and licensees
- Nailing down proper accounting procedures
- Developing strong responsible betting programs
Surprisingly one element that did not get much, if any, lip service in the Keystone State was integrity fees.
When asked about the state’s conversations with the leagues, Hensel said that, unlike other states, integrity fees and data rights did not merit much discussion.
One explanation behind this could be that Pennsylvania passed its sports betting laws before the Supreme Court ruled the Professional and Amateur Sports Protection Act (PASPA) unconstitutional. Given that timeline, there was not much wiggle room to squeeze in the big asks from the league with the law already on the books.