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PITTSBURGH (KDKA) — When sports betting comes to Pennsylvania, at least for the casinos, this state will have the highest tax rate in the nation.
“It’s not even close,” says Prof. Chuck Berry, who teaches sports entertainment at Point Park University. “Most of the states are somewhere between 10 and 20 percent. Nevada is around 7 percent. And we’re going to be at 34 percent plus an extra 2 percent, 36 percent, and that doesn’t include the federal excise tax as well.”
Berry says the high tax is not likely to deter the casinos from getting into the lucrative sports gambling business.
“Maybe, but I doubt it,” he said.
Illegal sports gaming is already estimated to be a $150 billion industry, and it can only grow when legalized.
Gaming companies have complained that Pennsylvania’s 36 percent tax is much too high, compared to the 10 percent tax over the line in West Virginia.
“They’re going to complain about it, but at the end of the day, they have a choice,” said PA Sen. Jay Costa, the Democratic Senate Leader, appearing at a taping of the KD/PG Sunday Edition show. “They can decide not to participate in this type of gaming. They are going to be 9 or 10 or 11 other entities that would participate here.”
Under Act 42, which set the tax, the casinos are the only outlets who can apply for a $10 million license fee to provide sports gambling at the casinos or online sports gambling through an app.
As for the state tax, it’s paid by the casino out of their profits, not the person betting.
“That tax is not going to impact the individual bettor,” says Berry.
But Berry adds the devil is the details of sports betting regulations yet to be written.
Pennsylvania is still a ways off from implementing sports betting under Act 42 passed late last year.
The Pennsylvania Gaming Control Board says it will take its time to implement the best rules and regulations to protect Pennsylvanians who bet on sporting events.
“We want to do this thing right, and we are not going to rush through it,” says Commissioner Sean Logan, a member of the Pa. Gaming Control Board.