The Blooming Sports Betting Industry in Pennsylvania
Pennsylvania was the odd duck among states that are legalizing sports betting in the US. But according to an expert from the top sportsbook pay per head provider, it is nothing to worry about. And he was right. Pennsylvania raised some eyebrows when their licensing fees were higher than all of the other states. Operators are to pay a $10 million-dollar license fee. In addition, their tax rate will be at a stiff 36%.
Of course, it took a while, but operators bit the very pricey bullet. And their investments have paid off quite well. Profits are turning, and both the government and the operators are earning more.
Pennsylvania Sports Betting Industry Numbers
According to data, their December numbers for sportsbooks have $16 million on wagers, and $2 million worth of handle. These numbers are promising, especially since there were only 3 sportsbooks operating.
This is not the first time that Pennsylvania has charged a lot for licenses. The state did the same thing back in 2004 for the licensing of slot machines. Operators then were paying 54% in taxes. But despite the steep tax rate, the market flourished, and Pennsylvania is currently the 2nd-largest market in the US for casinos. They are only second to Nevada.
When gambling was further expanded in the state, the tax rate was also at 54%, plus a $1 million-dollar licensing fee. Again, this was barely a hurdle as the industry was booming.
The Catch in The Steep Taxes
The steep taxes for operators was not purely out of greed, but a good execution of planning that benefits operators as well. The state of Pennsylvania sets a limit on the number of operators in the state. This allows operators a wider share of the market, with less competition to deal with. Of course, this will serve as a great example to other states who are considering sports betting and the implications on their local economies. We’ll be hearing about that soon in gambling industry news, surely.
