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State of the Union: US Sports Betting Update – Pennsylvania Sports Betting Industry Makes Encouraging Start to New Era

Legal sports betting enjoyed a promising start to life in Pennsylvania as sportsbooks took $2 million revenue off $16 million in wagers during December. Those figures are pretty impressive when you consider that mobile sports wagering has not yet been introduced in the Keystone State. Only Hollywood Casino near Hershey was open for the entire month, while Rivers in Pittsburgh and SugarHouse in Philadelphia flung open their doors in mid-December, and those three appear to have enjoyed a roaring trade. Parx Casino in Bensalem launched the state’s fourth sportsbook in January, while mobile sports betting is just around the corner, so those figures should shoot up in the coming months.

Pennsylvania State

The stats do not look all that spectacular when you compare them to the $319 million handle and $21.2 million revenue that New Jersey’s sports betting industry took in December. However, there are nine land-based sportsbooks and nine digital books in New Jersey and the market there is a lot more established. Operators in Pennsylvania are just finding their feet, and they are also lumbered with extremely punitive costs: they have to fork out a $10 million licensing fee and pay 36% tax on revenue to the state. The industry should feel optimistic after witnessing just three land-based books defy a challenging climate to report such robust figures.

Pennsylvania has a history of imposing eye-watering gambling taxes. It slapped a 54% tax rate on slots when it legalized them in 2004, and critics argued that the industry would have no chance of getting off the ground, but Pennsylvania has since gone on to become the second largest casino market in the USA after Nevada. The state again imposed the 54% tax on online casino games when they were permitted in 2017, but operators still applied for licenses and the games remain popular with bettors, despite the slots not paying out as well as in other jurisdictions. Pennsylvania’s tax is high, but the market could yet thrive.

Time for New York to Follow Suit

The onus is now on New York to follow in the footsteps of New Jersey and Pennsylvania and roll out legal sports betting. Its residents can now cross the border into either state and bet on sports in a safe, legal environment, and many are clearly choosing to do so. The FanDuel sportsbook at the Meadowlands, located a few miles away from Manhattan, is the best performing land-based book in New Jersey.

New York voters approved sports betting all the way back in 2013, on the condition that a federal ban that outlawed it was overturned. The Supreme Court axed that ban in May 2018, but New York legislators have since struggled to agree on a framework for sports wagering. That has been a source of frustration for many casinos and lawmakers, but light is beginning to emerge at the end of the tunnel. The agenda for a meeting on Monday, January 28, puts forward a list of proposed rules that will shape the state’s industry. This meeting will be open to the public and NYS Gaming will stream it live.

New York City

The proposal plans to allow sports betting on all professional sports, along with college sporting contests that do not feature a team based in the state. It will only permit land-based sports wagering. Four upstate casinos would be able to roll out sportsbooks immediately, while any casino operator in New York could apply for a license. The 2013 law does not permit online/mobile sports betting, although Assemblyman Gary Pretlow, the lead actor for New York gaming legislation in the lower chamber, recently told Legal Sports Report that he would push ahead with a bill to authorize mobile sport betting.

Governor Andrew Cuomo is all for it. “We invested in upstate casinos,” he said during a State of the State speech this week. “Let’s authorize sports betting in the upstate casinos. It’s here, it’s a reality, and it will help generate activity in those casinos.” He said he hopes to use sports betting to help plug a $3.1 billion hole in the state budget, although he did add that the state’s constitution would need to be altered. State law requires the budget to be in place by April 1, so we should see developments before then.

Sports Betting Spreading Like Wildfire

Sports betting in Washington, D.C. has edged closer after Mayor Muriel Bowser signed off legislation on Thursday this week. That effectively triggered a two-month countdown until the law comes into effect. However, it also needs to grapple with an effective framework and it is unlikely that sports wagering will take place in the US capital before spring. There are no casinos in the city, so plans are afoot to introduce sports betting in stadiums and arenas.

On the other side of the country, Arizona also saw its first sports betting bill – S 1158 – on Wednesday this week. It plans to allow gaming tribes across the state to offer land-based betting within their casinos. The federal government recognizes 16 tribes in Arizona, and they run 24 betting venues across. The bill would also permit the tribes to install kiosks in bars and social clubs. It plans to impose a tax of 6.75% on sports betting revenue, which is in line with neighbouring Nevada, the spiritual home of sports betting in the US. That is a huge contrast to the 36% that Pennsylvania demanded, but Arizona needs to be competitive with Nevada to prevent its residents simply flocking to Las Vegas and Reno.

Welcome to Las Vegas

Another newcomer to the landscape is Hawaii. Also on Wednesday the Pacific archipelago state saw a bill called H 1107 filed, and it plans to create a Hawaii Sports Wagering Corporation to oversee, operate and regulate and regulate sports betting. That would see it follow the model that exists in smaller states like Rhode Island and Delaware, where a state lottery runs sports betting in partnership with William Hill. Along with Utah, Hawaii is one of just two US states without any sort of gambling industry whatsoever, so if the bill passes it would mark a significant step for the nascent US sports betting trade.

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