A Quick Look At The Sports Betting And Online Casino Picture In PA As 2018 Ends

A Quick Look At The Sports Betting And Online Casino Picture In PA As 2018 Ends

As 2018 comes to a close, lets take a broad overview of the changes to the casino gaming picture in Pennsylvania, where we are at right now, and what we can expect in the new year.

Sports Betting

The recent changes in both the PA and US legal landscape cleared the way for sports betting and online casino gaming to get started in the state. Big moves were made in these directions in 2018, but legal and licensed sports betting got to market first.

Hollywood Casino went first, opening a physical sportsbook at Penn National Race Course in mid-November. They had the field to themselves until mid-December when Rivers and SugarHouse opened retail sportsbooks of their own.

Who will be next?

Next on deck is probably either Parx or Harrah’s, though Valley Forge has received conditional approval as well. The latter is partnering with heavyweight operator FanDuel, which is already tearing up the market in New Jersey. These three sportsbooks should open sometime in Q1 of 2019.

Presque Isle has also applied and we expect Mount Airy to soon apply as well. These operators should have sportsbooks up and running sometime next year as well.

The other five of the thirteen eligible land-based PA casinos don’t appear to be interested in opening a sportsbook. We will see if their reticence continues in the new year.

Why not everybody?

It’s hard to be sure why those casino operators who are eligible for one of PA’s sports betting licenses have decided not to pursue the opportunity. There are a couple obvious and glaring possibilities of course: the fees and taxes. A license to operate a sports book in PA costs $10 million. Perhaps even more discouraging, the tax rate to be applied to sports betting revenues is a jaw-dropping 36%.

Ouch. For comparison, the tax rate on sports betting revenues in New Jersey is 8.5%.

Mobile sports betting?

All the players who are entering PA’s new legal sports betting market are interested in launching mobile (online) versions of their sportsbooks and all will do so as soon as the Pennsylvania Gaming Control Board (PGCB) gives the go-ahead to do so. The PGCB is waiting until all operators have proven success and stability running their retail books before giving approval for the online versions.

At this time, we don’t know exactly when this will occur, but the second we do, we will let you know here.

Online Casino Betting

As with PA’s sports betting licenses, the state offered online casino licenses initially to their thirteen existing land-based casinos. Each of them were offered online slots, online table games, or online peer-to-peer (poker) licenses at $4 million each or they could buy the 3-pack for $10 million.

Thus far, ten of the local operators have applied for two or three of the new online licenses while three have abstained. The picture looks like this:

Taxes and fees a hindrance again?

Rivers Casino’s decision to cancel their online casino gaming application makes sense as their parent company (Rush Street Gaming) can operate under the SugarHouse license. It makes little sense to double-pay for licenses.

The other two operators who are sitting out may be of the opinion that the hefty license fee is simply too high. Alternatively, taxes might be the problem. Online slot revenue in PA will be taxed at an amazing 54% tax rate. Online table games and online poker revenue will be taxed at 16%. That might seem small when standing right next to the slot tax rate, but 16% is still very high compared to other states.

At any rate, for one reason or another, these casino operators don’t find the opportunity enticing enough to act.

But others do!

Now that PA’s local casino operators have made their choices, the PGCB still has ten available online gaming licenses, two each for online slots and table games, and six for online poker.

They have now opened the door for Qualified Gaming Entities (QGEs) to apply for these licenses to operate in the state. So far two outside entities have stepped forward to take a bite.

MGM and Golden Nugget have applied for QGE status and are eager to operate online gaming in Pennsylvania. MGM opted for all three licenses (at the bundled price of $10 million) while Golden Nugget opted to pay $8 million for just online slots and online table games.

Their applications are still pending, but given how established these operators are in other US states, they are expected to be approved without any issues.

All must wait

Legal sports betting in PA was able to be pushed into existence before 2018 came to a close, but online gaming won’t make it in time. Most of the PGCB’s attention seems to be on sports betting and online gaming has taken something of a back seat.

It also seems possible that the regulators are waiting until all operators have been approved before giving the go-ahead. Nobody wants to lose out on state-wide online market share because a competitor (who paid the same fee as you did) got out of the gate first.

At any rate, Pennsylvanians will have to wait at least until Q1 2019 for online gaming.

Check back here for all the latest news on this and other Pennsylvania gaming and bonus code issues.