Pennsylvania Gaming Legislation History

Pennsylvania doesn’t have a long gambling history due to a lack of people who support and oppose gambling. It took nearly three decades for the state to follow Florida’s introduction of a regulated gaming market.

Pennsylvania’s regulated gaming market started in 1959 when the Keystone State legalized horse racing with the Race Horse Industry Reform Act. Before then, horse racing thrived throughout the 1700s and 1800s, even though legislation prohibited it. Eventually, the restrictions were too much, which led those involved to race out of state.

The Race Horse Industry Reform Act led to the construction of Meadows Racetrack, which became the state’s first racetrack. Two years later, the construction of Pocono Downs, now known as The Downs at Mohegan Sun Pocono, opened its doors.

The industry saw the popularity and took advantage of the opportunity to bring more racetracks to the state. Four more tracks opened in nearly four decades, two in the 1970s, and two more in 2007. This ultimately brought the total to six racetracks.

By legalizing thoroughbred racing, the state was able to collect taxes from the revenue generated from the horse racing industry.

Creating of the Pennsylvania Lottery

The next venture taken towards legalized gambling was creating the Pennsylvania Lottery in 1971 through the passage of Act 91. The state’s first lottery ticket sold a year later for 50 cents. The lottery offered weekly cash prizes of $50,000 and periodically $1 million.

In the first six months of operation, four players won the $1 million prizes, which skyrocketed the popularity of these tickets. Sales nearly doubled their projections as the state brought in $57.7 million in revenue during the first year.

The state introduced more lotteries, including Pick 2, Pick 3, Pick 4, Pick 5, Cash 5, Match 6, Treasure Hunt, Cash4Life. The Pennsylvania Lottery eventually allowed residents to buy inter-state lottery tickets like the Mega Millions and Powerball.

In 1981, the Pennsylvania Bingo Law was passed, giving organizations the right to host bingo games for fundraising purposes only. Just seven years later, in 1988, the state passed the Pennsylvania Local Option Small Games of Chance Act which was essentially an extension of the previous bill.

With this enacted, charitable organizations like churches and youth sports clubs could host other small games of chance.

PASPA- and Post PASPA Effects in Pennsylvania

The Professional and Amateur Sports Protection Act did allow those who reside in Pennsylvania to get involved in sports betting. Nevada was the only market that allowed wagering on different sporting events throughout the year. However, Pennsylvania did everything that would prepare them for a sports betting market should the opportunity present itself.

Racetracks struggled to make money and looked for help in the early 2000’s. In 2002, gubernatorial candidate Ed Rendell made gaming a key component to his campaign that would permit racetracks to pursue slot licenses, thus legalizing slot machines to the horse racing venues.

In 2004, the legislature passed the Pennsylvania Race Horse Development and Gaming Act. Under the bill, seven locations were able to apply for a license. The state would also create five stand-alone slot casino licenses and three resort casino licenses.

Race casinos and stand-alone casinos were eligible to install up to 5,000 slot machines, while resort gaming facilities were limited to just 600. The revenue from these slot machines offered a form of tax relief. Rendell noted there was something much bigger for the gambling market.

In 2010, then Gov. Ed Rendell signed a bill that amended casino laws that allowed table games. In 2013, State Senator Tina Davis was looking into the world of online gaming that would change the course of how these types of games were being played. The iGaming talks did not catch lawmakers’ attention until 2015.

The Chairman of the House Gaming Oversight Committee, Rep. John Payne, led the way regarding iGaming legislation that year as he drafted HB 649 to legalize online gambling throughout the state.

The Senate explored the idea of the iGaming industry by putting together SB 900. The blueprint and writing of this bill, in particular, included reforms to the online gaming market in Pennsylvania but wasn’t so industry-friendly as to what Payne proposed in his bill.

The state legislature continued to explore other alternatives to bring in more revenue. In a matter of just four years, the opportunity to expand its gaming market had arrived.

The Keystone State is currently home to 10 land-based casinos, with six located in the heart of Philadelphia.

Mobile Sports Betting in Pennsylvania

The year 2018 was a monumental step towards the growth of the gaming industry across the United States. Pennsylvania became the seventh state to establish a legalized sports betting market in the industry. The Keystone is home to the fifth most populous state in the nation and has a loyal fan base for all levels of teams.

The launch of the first mobile sportsbook took place in May 2019. Since the launch began, Pennsylvania has become a prominent market in the industry, but the state’s barrier to entry is high. This means bettors across the state will have fewer online options to choose from compared to neighboring states like New Jersey.

New users who wish to sign up for an online sportsbook don’t have to register in person. This can all be done online at any time and anywhere as long as the individual is within state lines. Online providers that have the opportunity to enter the state must partner with a brick-and-mortar casino.

Sportsbooks in Pennsylvania can offer something in which it’s neighbor New Jersey cannot. Residents can place wagers on in-state collegiate teams except for college player props. The state has a plethora of Division 1 college programs, including the Penn State Nittany Lions, Pittsburgh Panthers, and many others.

Pennsylvania’s barrier to entry is high because its one-time licensing fees can run a sportsbook for $10 million. Pennsylvania has some of the highest tax rates based on revenue in the country, which is slated at 36 percent compared to New Jersey, which is slated at 8.5 percent.

It’s easy to see why the market could be undesirable to some sportsbooks. However, Pennsylvania is one of the leading markets in the industry regardless of its high demands for sportsbook companies.