High fees and taxes could keep sports betting out of the Keystone State

Getty Images

Pennsylvania is one of the very few states that promulgated a plan for sports betting before the Supreme Court opened Pandora’s floodgates to nationwide wagering. And Pennsylvania ultimately could end up being one of the very few states that ultimately doesn’t have a robust sports betting program.

As explained by A.J. Perez of USA Today, Pennsylvania’s plan calls for a $10 million initial fee and a whopping 34-percent tax on revenue. In contrast, Nevada requires a tax of only 6.75 percent on the gambling revenue.

“We haven’t made a final determination on whether to pursue sports betting in Pennsylvania,” Penn National Gaming V.P. of public affairs and governmental relations Jeff Morris told Perez. “In addition to the high application and annual licensing fees, the challenge will be trying to make the 34-percent tax rate work — this would be the highest tax rate in the world on sports betting. For comparison, West Virginia recently passed a sports betting law at a 10-percent tax rate, which is the range most states are considering.”

This may keep many/any sports books from setting up shop in Pennsylvania, and in turn it may keep the state’s two NFL teams, the Steelers and the Eagles, from taking full advantage of the in-stadium betting experience. (Not to mention the five other major-league sports teams in Pennsylvania.)

Time will tell whether Pennsylvania revisits its effort. As it stands, however, Pennsylvania apparently hopes to grab so much of the gambling money that there won’t be any at all.

15 responses to “High fees and taxes could keep sports betting out of the Keystone State

  1. I live in this wonderful state. We also have the nation’s highest gasoline taxes as well. the state as a whole has become such a bloated government entity it cannot survive unless taxes are at a premium. Pretty sad. I apologize PFT fans, not the place for a political rant..sigh..

  2. Governments do not understand business. Nor will they ever understand. Revenue is NOT profit. Profit is revenue minus expenses. Therefore, the odds of turning a profit in sports gambling with a 34 percent tax on revenue is less than ZERO. I guess no tax money is better than some tax money.

  3. they understand very well.. you are the people that don’t… to limit the gambling experience without saying a flat NO they tax it heavily just like cigarettes/tobacco…. dummies

  4. Those sneaky PA politicians. They don’t want sports betting so they made it impossible for a legal entity to make money at it. With illegal betting on the losing end of the Supreme Court’s decision I can guess what state those less than reputable business men will move their offices to.

  5. CA will change state law to allow gambling, then tax it 50%, claim it will be for education and roads. Roads will get worse, schools will continue to be ranked in the bottom 3 in the country.

  6. logicalvoicesinmyhead says:
    May 18, 2018 at 2:55 pm
    Governments do not understand business. Nor will they ever understand. Revenue is NOT profit. Profit is revenue minus expenses. Therefore, the odds of turning a profit in sports gambling with a 34 percent tax on revenue is less than ZERO. I guess no tax money is better than some tax money.

    The tax is going to be on net revenue, did you read the law? This is a tactic used by the business to try to get a better tax rate, they did the same thing in 2006 when PA legalized casinos and had a 55% tax on revenue, the casinos said they wont make any money, and they are raking it in now.

  7. 34 % ?????
    Talk about greed. Geez, even the leagues owners arent that greedy.
    No wonder why everyone hates living in the Keystone State

  8. I assume you mean net income or EBT instead of “revenue”. Losing 34%+ of revenue to tax would be insane and kill the business model before it began.

  9. You could replace Pennsylvania with any other state, and your headline would still be just as accurate, or inaccurate.

    This stands to be a windfall for both the federal and state governments. Because of that, no state will set the rate so high as to prevent the industry from setting up shop in their state.

  10. This is the same state where legislators gave themselves a 16-34% raise in the middle of the night, with no opposition?

  11. Government understands business completely. They also believe the PA Market is big enough that they can ask for a lot of money. Remember, taxes on gambling are a voluntary tax. Only stupid people gamble. So no politician is going to lose his office “raising” a sin tax like gambling. And a gambling tax is certainly more popular than a soda tax. .. The reality is that due to decaying infrastructure, government pension crisis, and increasing inflation, government needs to find new sources of revenue. Anytime you can get new sources of revenue without increasing sales tax, income tax or property tax, you are going to find that government will do that.

  12. great post; no1 in their right mind would invest/start a sports book in PA with these numbers. just drive to NJ.

Leave a Reply

You must be logged in to leave a comment. Not a member? Register now!