- Pennsylvania has one of the highest tax rates on sports betting revenue among any state with legal gambling on sports.
- At first, this was seen to be detrimental to their market but it has now since proved the naysayers wrong.
- The state surpassed New Jersey in terms of revenue for the month of November with fewer businesses in the market.
PHILADELPHIA – How is it that PA sports betting beat out New Jersey who took in $246 million more in wagers in the month of November? The 36% tax rate implemented on all sports betting revenue by the Keystone State would be the answer.
New Jersey has a tax rate of 8.5% for all retail locations and a rate set at 13% for their internet and mobile betting platforms. Pennsylvania collected $316.5 million in wagers for November which totaled to $5.3 million being collected in revenue.
That is $1.3 million more in taxes than New Jersey who had $562.5 million in sports bets with $4 million in revenue for the state.
Are Higher Tax Rates Better?
When Pennsylvania sports betting was first legalized after the repeal of PASPA, the idea of a tax rate of 36% which is higher than other states with the inclusion of an initial fee of $10 million for a license to operate seemed outlandish.
The attraction by establishments to pay such a fee was slow going. But soon, many decided to go along with it because if for nothing else, offering sports betting at their casinos would get more people in the door and profits could be made elsewhere.
With the wagering on sports becoming more popular by the day, other states are taking notes from Pennsylvania and their bill PA HB 271 that made all of this possible.
States with legal sports betting are already considering a raise in their tax rates and other states drawing up paperwork to make legal sports betting a reality are putting up bigger tax rates within their stipulations.
Pennsylvania wasn’t afraid to fly high and now they are profiting more than the powerhouse that is New Jersey despite having less business.
The Keystone State is now joining the ranks of New Jersey and Nevada to make up over half of the business in the sports wagering market nationwide. Much of this business can be attributed to the use of mobile and internet outlets for gambling.
Over 80% of betting on sporting events comes from the use of the technology rather than going to an actual location. In the end, Pennsylvania gambled and won with their tax rate requirement to quickly become one of the sports betting powerhouses in the country.
Christina has been writing for as long as she can remember and does dedicated research on the newly regulated sports betting market. She comes from a family of sports lovers that engage in friendly bets from time to time. During the winter months, you can find Christina baking cookies and beating the entire staff at Mario Kart…the N64 version of course.