On May 14, 2018 The US Supreme Court (SCOTUS) repealed the nationwide partial prohibition on single-sport wagering that had given Nevada a de facto monopoly* on the lucrative practice. That prohibition was the 1992 Professional and Amateur Sports Protection Act (PASPA). Pennsylvania legislators were ready for the SCOTUS decision and paved the way for their citizens to enjoy the full benefits of the repeal thanks to legislation passed last year. Here’s what you need to know about it.
New Jersey Governor Chris Christie: Pennsylvania’s heroic blocking fullback?
The PASPA was a congressional creation designed in 1992 to stem the “scourge” of illegal sports betting across the country. In a predictable pattern of unintended consequences, the legislation instead created a black (or gray due to lax enforcement) market valued in the tens of billions of dollars.
The case before SCOTUS that lead to the PASPA’s repeal was Murphy vs. NCAA, also known as the “New Jersey sports betting case.“ At the heart of the issue was New Jersey asserting its state’s right to regulate an activity (sports betting) underneath the broad federal ban. New Jersey had been bridling under the perceived federal overreach since 2009 when a state senator announced plans to challenge the prohibition. This challenge came in the form of a successful 2011 referendum that established legal and regulated sports wagering in New Jersey. The major sports leagues (both professional and amateur) challenged New Jersey’s actions and although the leagues (spearheaded by the NCAA) won the initial decisions in district and circuit courts, Governor Chris Christie’s vigorous efforts on appeal finally brought the case before SCOTUS, who in repealing PASPA, cleared the way for all states to regulate sports betting within their jurisdictions, free from a federal ban.
Pennsylvania was ready to capitalize on the opportunity
Seeing what New Jersey was up to and what opportunities lay in store, Pennsylvania law-makers were pro-active. In October of 2017, the PA Senate passed a bill to legalize online poker, sports betting, daily fantasy sports and other online casino games. Governor Tom Wolf quickly signed the bill (H 271) into law, legalizing PA online gaming under the Pennsylvania Gaming Control Board (PGCB).
It’s still early, so all the details have yet to be fleshed out but we know a few things. PA sports betting licenses will be available to all 12 current land-based casinos and “racinos.” The sports betting license fee is hefty at $10 million and so is the tax rate of 36 percent. For comparison, Nevada imposes a tax rate of 6.75 percent in their jurisdiction.
Despite these hurdles, there is no doubt that Pennsylvanians love to bet on their beloved teams and operators will move to be able to legally accept those wagers. It’s a good time to be a sports fan in Pennsylvania.
* Oregon, Montana, and Delaware were also exempted from PASPA but never legalized single-game sports betting.