Pennsylvania is now at the forefront of sports betting in the United States. On May 14, 2018 the Supreme Court overturned the federal ban on sports betting put in place by the Professional and Amateur Sports Protection Act (PASPA). As part of Pennsylvania’s gambling expansion law of 2017, it set up a framework to offer sports betting should the law change.
Now that the law has changed, Pennsylvania is one of four new states that can start offering legal wagering. The other states are West Virginia, Mississippi, and New Jersey.
How big will the market be for Pennsylvania sports betting?
Getting a read on the size of the sports betting market in Pennsylvania is difficult, given several factors.
First, outside of Nevada, legal sports betting didn’t really exist in the US. And while there are estimates out there about how much is wagered at illegal sportsbooks — both domestically and offshore — those are just guesses.
Here’s what we do know. Nevada does just over $11 billion in gaming revenue each year. While gaming win on sports betting can vary from year to year, in 2016, total handle (amount of money wagered at sportsbooks) clocked in at $4.5 billion.
Meanwhile, Pennsylvania checks in at about $3.2 billion of total gaming revenue. If there were a direct correlation between total gaming win and sports betting, then we would expect to see somewhere on the order of $1 to $1.5 billion in handle in a fully mature PA sports betting market.
However, there are reasons to think the Pennsylvania sports betting market could be even bigger than that. The aforementioned interest in pro sports makes the market primed for even more wagering as a percentage of gaming dollars in the state.
Assuming a hold of somewhere north of five percent for sportsbooks, Pennsylvania casinos stand to generate upwards of $50 to $75 million in revenue, possibly reaching nine figures.
Who will the major players be in the PA sports betting market?
There are many casinos in Pennsylvania. And undoubtedly all of them will want to offer sports betting. But some markets/casinos will be better for sports betting than others.
The three Philadelphia-area casinos should be the center of attention for PA sports betting, undoubtedly. The city is home to franchises in the four major professional sports leagues, featuring a rabid fan base for all those sports.
SugarHouse Casino, Parx Casino, and Harrah’s Philadelphia are best poised to cash in on the city’s intense interest in sports. Not only will the casinos benefit from the revenue from handle on sports betting, it will also get more people in the door to enjoy the casinos’ other amenities and gambling options.
Rivers Casino already has a monopoly on the Pittsburgh market. But it should be poised to cash in even more with legal sports betting. The city has both NFL and NHL franchises.
As the second-biggest city in the state and one with a large sports fan base, it would be a boon to Rivers’ bottom line.
For years, racetracks have eyed sports betting as a possible way to woo bettors in their doors.
Penn National, near the center of the state — and far from Philly and Pittsburgh — benefits greatly from the change in the law. The complex now features both Hollywood Casino and the racetrack, and sports betting would be just one more draw.
Who will regulate sports betting in the state?
The Pennsylvania Gaming Control Board (PGCB)will oversee sports betting in the Keystone State. Both racetracks and casinos can accept wagers. There will be both in-casino wagering as well as mobile wagering.
In order to accept bets, casinos need to apply for a $10 million sports betting license. In addition to this hefty fee, there are also some hefty taxes to go along with it.
There is a 34 percent tax on gross gaming revenue from sports. Additionally, there is a .25 percent fee on handle and a two percent tax that serves as a local revenue share.