Let’s be honest. No matter what, Philadelphia Eagles fans are going to have a great Super Bowl weekend. The team, which has never won the “Big Game” is making its third appearance in the title game. The future is bright, with a young, talented roster.
But think about how much more fun it would be if sports betting in Pennsylvania were legal.
AGA says over $4 billion wagered Super Bowl weekend
Each year, the American Gaming Association (AGA) likes to remind us all how much people gamble on a single football game. Moreover, it likes to reiterate how silly it is most of this gambling is illegal, done through offshore sites.
This year’s release estimates $4.6 billion in Super Bowl wagers. Of those, a projected three percent are done at legal Nevada sports books. That $130 million or so is huge business for Nevada. Compared to how much wagering there is though, the amount is but a pittance.
AGA President Geoff Freeman raised the question we all are asking: Is 2018 the year things finally change?
“Thanks to the failed federal ban on sports betting, Americans are sending billions of their hard-earned dollars to corner bookies, shady offshore operators and other criminal enterprises. The big question we’re asking: Is 2018 finally the year when governments, sporting bodies and the gaming industry work together to put the illegal sports betting market out of business?”
Pennsylvania primed for change in betting landscape
Hopes are high this year is the year things change. It isn’t ignorant optimism either. In December, the Supreme Court heard oral arguments in the New Jersey sports betting case Christie v. NCAA et al. The case challenges the legality of the Professional and Amateur Sports Protection Act (PASPA).
If the court rules in favor of New Jersey, it should set up a scenario where any state who wants sports betting can legalize it. Pennsylvania is prepared. As part of the October gambling expansion law, the state can begin accepting wagers once the federal ban against betting changes.
Casinos could accept wagers and offer online and mobile wagering as well. If this sounds great, don’t get too excited. There is some bad news too.
Like pretty much every other facet of gambling in PA, taxation on wagering is high. Under the current bill, the rate is 36 percent. By comparison, Nevada taxes all gaming at the same 6.75 percent rate. The federal government then taxes .25 percent of the handle.
With such a high rate and a $10 million fee for a wagering license, PA sports betting is a tougher sell to casinos than it ought to be. Nonetheless, it seems like at least some casinos will give it a shot. In particular, the forthcoming Live! casino, which will be situated right next to Lincoln Financial Field, as well as all the other major sports venues in Philadelphia.
After all, what Eagles fan wouldn’t want to place a small wager before heading into the game? And if they don’t? Well, they could always wager on a mobile app instead.
The hope is Pennsylvania lawmakers revise the tax rate, but for now PA sports books will not be as popular as one might think.
Sports books love a good home team
Quantifying projected sports betting revenue is tricky. Because so much is wagered illegally, numbers are often off. More often than not, the projections are higher than expected.
So instead, let’s look at a sports betting market where we can see concrete numbers. Nevada.
Last year was a record-breaker for Nevada books. With $4.87 billion in wagers, state casinos generated $248.8 million in 2017. In 2016, the books took in $219 million after a record year in 2015 generated $231 million in revenue.
It is tough to pinpoint the cause of the bump. Numbers were up in every category and every sport. However, it is worth noting that Las Vegas got its first major league sports team last year. Not only did the NHL’s Vegas Golden Knights start playing, they played very well.
Problem for the books is that this winning team is costing them money. With unparalleled interest in hockey wagering thanks to the team, there are growing pains as bookmakers refine their hockey lines. So this may not explain the uptick in revenue, but it does help explain the uptick of $360 million in handle.
With storied sports history in both Philadelphia and Pittsburgh, Pennsylvania sports books could benefit tremendously from the traffic home-team wagering would generate.
For now though, the friendly wagers and the big bets are happening behind closed doors. While the Eagles keep flying, PA sports betting is still waiting to hatch.
