Pennsylvania Sports Betting

  • The Pennsylvania Gaming Control Board released October’s sports wagering report, detailing a record high in monthly handle ($829 million) and the sixth highest tax contribution $17.3 million.
  • While the revenue created from Pennsylvania sportsbooks hits the general fund, analyzing Pennsylvania’s expenditures show what sports betting taxes can support each year.

HARRISBURG, Pa. – Since their November 2018 launch, Pennsylvania has been a leader in taxes taken in from sports betting operators. With a state and county tax rate totaling 36%, Pennsylvania has benefited as much as $22.9 million in a single month alone.

For the October 2023 report released by the Pennsylvania Gaming Control Board on Friday, the state recorded their sixth highest total in terms of state and local government tax contributions at $17,334,020.

The result? The local and state government have received $500,714,812 in five years time. But the leap to $1 billion won’t take as long.

With the expansion of Pennsylvania sportsbooks online, they have paid an average of $12.6 million per month since that $22.9 million high in November 2021.

Nowadays, $750 million handles are standard for Pennsylvania, evident from their first $800 million month for October. If they can close in on that level until March Madness ends, they’ll be almost 20% on the way to $1 billion.

While a billion dollars in total sports betting taxes likely won’t be seen in Pennsylvania until 2027, it’s been an excellent start for budgets across PA.

Where Does Pennsylvania Sports Betting Taxes Go?

Sportsbooks pay 36% of their monthly revenue after adjusting for promos and bonuses. But this money goes into the Pennsylvania general fund.

In this fund, Human Services (33%) and Education (17%) make up half of Pennsylvania FY 2023-24 expenditures by department.

On the Human Services side, over 99% is in a general fund. About 60% of that fund is spent on capitation (advance payments to physicians on a per patient basis) and Health Choices (PA’s managed care programs for medical assistance).

On the Education side, nearly 88% of the department spends through a general fund as well. Over 50% of this fund supports “Basic Education Funding” and retirement for school employees.

Showing support for these programs is important. But in reality, PA sports betting tax benefits are only a drop in the bucket regarding the state’s total spending ($55.2 billion per year).

Total Tax Benefits From Sports Betting In PA

  • 2021 (Calendar Year): $122.4 million
  • 2022 (Calendar Year): $144.4 million
  • 2023 (Calendar Year): $134.3 million (10 months)

The annual tax benefits for sports betting in Pennsylvania was only $144.4 million for all of 2022. Projected to be around $165 million for 2023, that 2023 projection would only pay for about 10-15% of the County Child Welfare Fund. This is a fund that sees 2% of all expenditures from the Human Services General Fund.

With this, the addition of legal sports betting may not be impacting the major programs in the state, but it has still helped the General Fund balance float around the July 2022 high.

So, what can Pennsylvania sports betting taxes solely fund? Annually, it’s able to pay for many services and programs just by itself.

  • Crime Victims Assistance (~$60 million)
  • Inmate Education and Training (~$45 million)
  • Manufacturing for The Department of Corrections (~$30 million)
  • Opioid Response (~$15 million)
  • Recovery Schools (~$15 million)
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