Pennsylvanians have only had the privilege of being able to make legal sports bets for the last couple of months, but the new activity is already attracting some heavy hitters in the industry. These bookmaking movers and shakers are very interested in staking out their piece of this brand new market.
On a more personal note, PA’s recent legal gaming changes are also prompting at least one native Keystone Stater to leave a more mature US sports betting market to run a brand new sportsbook back home.
It goes to show when a state legalizes activities that are popular with the citizenry, a lot of good things can happen.
The current sportsbook situation looks strong
Harrah’s Casino is the most recent operator on the sports betting scene in PA. When they launched a new sportsbook last month, it became the sixth legal retail bookmaking operation in Pennsylvania. There are currently five operators running six books (Parx Casino already has two retail locations). That’s an impressively consistent level of expansion since November of last year, when Hollywood Casino opened the first licensed sportsbook in the state. The other operators are Rivers Casino in Pittsburgh and SugarHouse Casino in Philadelphia.
But the PA sports betting “gold rush” is far from over. More casinos are slated to open more sportsbooks with the help of more technical partners. Specifically, some major international sportsbook operators and even a Las Vegas sportsbook VIP are on the way to Pennsylvania.
The impetus of all this activity is the fact that last year the US Supreme Court struck down 1992’s Professional and Amateur Sports Protection Act (PASPA) which had prohibited states from legalizing sports betting within their jurisdictions. Only Nevada (and to a lesser extent Delaware, Oregon, and Montana) were exempted from the prohibitory effects of PASPA. Nevada took the fullest advantage of the de facto monopoly but now their privileged position is beginning to crumble.
Pennsylvania lawmakers followed the example of New Jersey and a few other states and, anticipating the change, created legislation that paved the way for a massive expanse of legal gaming in the state. Perhaps the most important component of this new legislation is legalized sports betting.
FanDuel hopeful to arrive in PA in time for March Madness
FanDuel is well known to US sports fans as a Daily Fantasy Sports (DFS) operator. However, they became much more when they were acquired last year by the UK-based sports betting giant Paddy Power Betfair. With that merger, FanDuel became a major player in the sportsbook industry. BetFair had already established a strong European presence and thanks to the recent changes in US law, the bookmaker can now operate on this side of the Atlantic. In doing so, BetFair can leverage the brand recognition Americans have with FanDuel.
FanDuel/BetFair has already established a foothold in the US market. Last year they launched their New Jersey sportsbook under the license held by Golden Nugget Casino. The next state they have their eyes on is Pennsylvania, with more states hopefully to follow.
FanDuel and Valley Forge Casino have announced a partnership in which the DFS giant will run Valley Forge’s new sportsbook. Both parties hope they will be able to open in time for March Madness. With this partnership, FanDuel will have access to the US sports betting market in two states and it’s clear they will want to continue to expand as more states are considering legalizing and regulating sports betting.
Valley Forge area to quickly get two new sportsbooks
Since sports betting was legalized in Pennsylvania, Parx Casino has moved quickly to gobble up a big a share of the new market. Last month they opened two retail sportsbooks. The first was at their main casino location with a second quickly following at an off-track betting (OTB) site at the South Philadelphia Turf Club, located in an area of Philadelphia close to several major sports stadiums. In addition, Parx Casino will be opening their third retail sportsbook also at another OTB. This one, the Valley Forge Turf Club is located (appropriately enough) in the Valley Forge area.
OTB parlors and sports betting go hand in hand. The OTB clientele are there to bet horses, obviously, but there is a large crossover in betting interest between horse (and dog) racing and other sporting events. Parx Casino’s nimble moves should see them doing a brisk business at all three locations.
Las Vegas sportsbook VIP heads home to Pittsburgh
Pennsylvania’s burgeoning sports betting market has tempted one of its own to finally come home from self-imposed exile in Nevada. Jimmy Vaccaro, Pittsburgh native and South Point Casino’s Director of Sports Marketing (in Las Vegas) is heading back home to Pennsylvania to run the new sportsbook at Rivers Casino.
Pittsburgh’s Rivers Casino launched its sports betting operation in December of last year, simultaneous with its sister property SugarHouse Casino opening theirs in the Philadelphia area. Both casinos are owned and operated by parent company Rush Street Gaming.
More sportsbooks activity on the way
As already mentioned, the next PA casino sportsbook to open will probably FanDuel’s at Valley Forge Resort and Casino. After that, the next one will probably be at Presque Isle Downs and Casino. Presque Isle’s sports betting application is still pending approval before the Pennsylvania Gaming Control Board (PGCB) but no problems are expected to hinder their success in this endeavor.
Mount Airy Casino and Mohegan Sun Pocano are also expected to make moves to open sportsbooks this year. These casino operators haven’t applied for licenses yet, but have made more than one announcement declaring their intention to take sports bets in the very near future.
What about DraftKings?
It is expected by many that one of these last three casinos will be the path DraftKings uses to gain access to Pennsylvania. The leader in the New Jersey sports betting market, DraftKings has made it clear they will attempt to operate in PA as well.
As with the other well known DFS-operator-turned-bookmaker, FanDuel, it is expected that DraftKings will find their way into new US markets state by state as legal sports betting spreads across the US.
Wait, what about the other PA casinos?
There remain four more Pennsylvania land-based casinos who could apply for a sports betting license but have yet to do so. These are Sands Bethlehem, Lady Luck Nemacolin, The Meadows, and Stadium Casino. Why would a casino ignore such a potentially lucrative opportunity? The answer probably lies in the massive costs associated with this new privilege.
A Pennsylvania sports betting license costs $10 million right up front and all sportsbook revenues will be taxed at a rate of 36%.
These taxes and fees are enormous compared to other jurisdictions and could prove an impediment for some operators. Perhaps it doesn’t make sense for a smaller casino to pay a large up front fee and face a steep tax rate on an unproven market. On the other hand, even a small casino can augment the reach of their sportsbook by offering mobile (online) sports betting. Pennsylvania’s sports betting licenses allow for mobile betting – though the PGCB has yet to authorize this feature.
One thing is for certain. Pennsylvania’s sports betting future is bright.