First Pennsylvania Casino Applies for Sports Betting License

First Pennsylvania Casino Applies for Sports Betting License

Pennsylvania sports betting has an applicant – finally.

Hollywood Casino at Penn National Race Course, through its parent company, became the first Pennsylvania gaming facility to submit a sports betting application. The application means the state could see its first bet before the end of the year.

With sports bets possibly coming to the Grantville facility, it will also likely compel most of the state’s 12 additional casinos to follow through will applications of their own. The fifth-largest state in the nation by population, Pennsylvania could quickly become the country’s largest sports gambling market.

That growth could still be months away. It took the better part of a year just to receive an application.

Why Casinos Waited Nearly a Year To Apply

Pennsylvania passed one of the nation’s most comprehensive gambling expansion bills in October 2017. Along with legalized casino-style gambling options at truck stops and airports, the bill legalized online betting as well as sports betting, even though there was a federal ban in place at the time that preempted the state from legalizing bets. Because Pennsylvania already had a sports betting law on the books, state casinos could have in theory taken bets the same day the Supreme Court struck down the ban, which came in May 2018.

More than three months later, the state still hasn’t taken a single wager.

The gambling bill included a $10 million license fee and a 36 percent tax on sports betting revenues – far and away the highest tax in the nation, nearly four times higher than in neighboring New Jersey. Historically casinos have some of their lowest margins on sports bets, typically around five percent. For every $100 wagered, the casino keeps about $5, a rate which is significantly lower than slots or most table games. A 36 percent fee would in effect lower casinos’ keeps to about $3 per $100 wagered.

Not surprisingly, this dissuaded any of the commonwealth’s 13 eligible casinos from applying. Sustained efforts to lobby lawmakers for lower fees proved fruitless. Lawmakers adjourned the 2018 legislative session without any amendments to the bill and Gov. Tom Wolf showed little inclination to reconvene lawmakers in a special session, which would be necessary to change a law. Legislators almost certainly wouldn’t meet again until the next scheduled legislative session in January 2019, and even then it was unlikely they would change their opposition to a lower fee.

Without any casinos to evaluate for a license, Pennsylvania sports betting remained in a quagmire, even after New Jersey and Delaware combined to gross more than $50 million within their first two months taking bets.

The fortunes of Pennsylvania’s neighbors undoubtedly proved a catalyst for the initial Pennsylvania sports betting application, if not so much as a revenue opportunity but as a way not to lose money across the border. The application was a groundbreaking step to slow the bleeding of lost revenue. It will still be a while until they can apply that tourniquet.

Obstacles Remain for Pennsylvania Sports Betting

Pennsylvania gamblers shouldn’t bet on legalized sports wagering in the immediate future. Gambling regulation oversight is a lengthy process even in the best scenarios. Mississippi, which like Pennsylvania passed a sports betting bill of its own even before the Supreme Court decision, and has one of the nation’s most established casino industries had to wait several months to place its first bet. West Virginia won’t take it initial wager until Sep. 1. Though its gambling partners were much more eager to take bets than their counterparts in Pennsylvania, both states still had to wait through extensive regulatory checks

In absence of any federal guidelines for states looking to take bets, each jurisdiction has gone about the process in different ways and through varying types of regulatory bodies. In the commonwealth, sports betting runs through the Pennsylvania Gaming Control Board. The Philadelphia Inquirer reports the board won’t hear Hollywood Casino’s application until its Oct. 3 meeting at the earliest. The board will then evaluate the merits of the application, test its equipment and assure compliance with all state regulations. That could take several more weeks.

The application itself shouldn’t cause any more delays. Hollywood Casino is managed by Penn National, a leading U.S. gaming company with more than two dozen properties across the country. William Hill, a global gaming giant and the largest sports gambling operators in the U.S., will almost assuredly walk Hollywood Casino without objections from regulators.

In announcing the application, Penn National officials expect to take bets later this fall. With Hollywood paving the way, its in-state competitors are sure to follow soon after. Parx Casino near Philadelphia already has a partnership in place with gaming software provider GAN and is likely to be one of the next facilities to submit an application. Leading opperators like William Hill have also made clear their attentions to participate in the market.

Even without a known day for its first bet, the application presents a long-awaited milestone in Pennsylvania gambling – and a major development for sports betting across the country.

Interested in learning more about the current US sports betting landscape? Check out our latest Gamblecast explaining everything you need to know about US sports betting:

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