PA’s Mount Airy And Mohegan Sun Pocono Apply For Sports Betting Licenses

PA’s Mount Airy And Mohegan Sun Pocono Apply For Sports Betting Licenses

Last Friday, the Pennsylvania Gaming Control Board (PGCB) announced that Mount Airy Casino Resort and Mohegan Sun Pocano have applied with the state for sports betting licenses.

These two PA casinos are arriving a little late to the sports betting scene in Pennsylvania. The state has already allowed five PA casinos to begin sportsbook operations in seven retail locations (Parx Casino has three) and two others have already applied and been approved and will open their books just as soon as the PGCB gives them final authorization to do so.

All in all, nine of Pennsylvania’s thirteen eligible casinos are taking part in the newly legalized sports betting market while four others have not. The state’s local casino sportsbook picture looks like this:

Standing on the sidelines (so far) are:

Why doesn’t everybody join in?

The ability to run a sportsbook without violating the law is clearly a valuable privilege, so why are these other casinos holding back? The answer is the heavy costs charged by the state for running a sportsbook legally. The sports betting license costs $10 million which is high, compared to other US states who have recently licensed sports betting.

Perhaps more daunting, Pennsylvania charges a 36% tax rate on sports betting gross profits. This tax is also much higher than what other states are imposing on sportsbook operations. For comparison, New Jersey charges 8% and West Virginia 10%. Nevada’s tax rate is even lower, at 6.75%.

Pennsylvania’s legislators and regulators have clearly imposed a very high burden on legal sports betting in their state. It remains to be seen what impact this will have compared to other states. The most optimistic possibility is that sports betting is popular and successful even with the high taxes/fees and the state gets a nice boost in revenue it can use for worthy state-funded projects.

The less attractive possibility is that the high tax rate cripples legal sports betting, causing casinos to close their books (or not even bother to open any as four casinos have already decided). This will push gambling on sports back into the black market, with all the societal harms associated with such prohibition.

What about mobile gaming?

Pennsylvania’s sports betting license also allows for casinos to offer online (mobile) versions of their sports betting operations. The PGCB is holding back authorization for mobile sports betting for a little while longer. They want to make sure all the retail sportsbooks are up and running without any problems before they move forward with mobile wagering.

When this final approval will come is unknown, but industry experts expect mobile sports betting in the state will be up and running sometime in 2019.

Legal sports betting sweeping the nation?

It looks like “going to Las Vegas to bet on some games” might be a quaint bit of nostalgia for US sports bettors. Since the US Supreme Court struck down a 1992 law effectively outlawing sports betting nationwide (except for a couple small exceptions – Nevada being the most noteworthy), several states have begun licensing, regulating, and taxing sports betting within their jurisdictions. New Jersey, West Virginia, and Pennsylvania were among the first, but more and more states are entering the arena.

Before too much longer, more US states will allow legal sports betting than not.