By Sally Fahey
It has now been seven days since Pennsylvania casinos could begin applying for sports betting licenses.
So, as Delaware has already begun taking bets a couple of days ago, what’s the holdup in PA?
By May 31, Pennsylvania state regulators adopted their first regulations of sports betting. The following day, the sports betting license application process opened up. Yet, just a few days into the state’s latest step toward entering the industry, casinos are apparently hesitant-at-best to get in on the action.
Under the temporary regulations, PennsylvanIa casinos with licenses can conduct sports betting at any of the 12 casinos as well as via sports betting apps. The regulations also allow wagering at off-track betting facilities in the state.
The highest hurdle is the onerous $10 million initial fee for casinos to receive approval to offer sports betting. Add in the sky-high tax rate of 36 percent on sports betting revenue. If the rate stands, it will be the highest rate in any jurisdiction in the world.
“Pennsylvania is in a different bucket because of the tax rate,” Joe Asher, CEO of William Hill, told the Inky. “We can’t figure it out. Because of it, we haven’t spent the time or effort in Pennsylvania that we have in New Jersey. The tax rate is such a big challenge.”
Consider that New Jersey’s proposed tax rate is eight percent. Nevada, meanwhile, has a 5-percent state tax rate.
“If you’re paying $10 million up front for the privilege of paying 41 percent (PA’s 36 percent plus the federal government’s 6-percent rate) in … taxes, plus the infrastructure costs, it’s difficult for me to see how you make money in Pennsylvania.”
In New Jersey, UK bookmaker William Hill has announced partnerships with Monmouth Park racetrack and Atlantic City’s incoming Ocean Resort Casino. Resorts Casino Hotel teamed with daily fantasy sports giantDraftKings as its sportsbook.
In Pennsylvania, however, there does not seem to be as much urgency to land partners ahead of sports betting legislation.
The Keystone State was supposed to be one of the first to roll out regulated wagering. After all, the state in 2017 legalized sports betting as part of a comprehensive gaming expansion. Now, though, it seems Pennsylvania will be lucky to feature any sportsbooks. That is unless lawmakers’ attitudes change.
Doug Harbach, spokesman for the PGCB, said the application process is open for 120 days. He noted that within the timeline are the starts of the college football (86th day) and NFL (98th) seasons. The PGCB is also open to comments from interested parties until June 15.
Yet some casinos are beginning to rethink what to do with sports wagering.