When it comes to sports betting everyone is excited to hear the latest happenings around the new budding field and what opportunities it as on offer. The state of Pennsylvania has been preparing for the eventual scrapping of the PASPA and in the process of doing so, the taxes applied to the field were also debated, especially over the span of the last week as they become known to the public.
The state of Pennsylvania started its work on its new and improved gambling field and the continuous preparation for the potential removal of the sports betting ban across the states is finally ready to bring benefits to the region. The Keystone state might be one of the first gambling fields to introduce legal sports betting to its residents and the foreseeable future appears to be bright.
This Monday saw the long-anticipated ruling of the United States Supreme Court on sports wagering and as it was officially decided the Professional and Amateur Sports Protection Act of 1992 is redundant and outdated, therefore it should no longer affect the operation of sports bookmakers within the country.
However, in the past several days one topic has become the hottest one in the state, as more and more gambling businesses are concerned by the potential size of the taxes which could be introduced in the future sports betting sector. According to the information issued recently, the state demands a $10-million initial fee for receiving a license for operation.
This is what each of the sports betting operators will be obliged to pay in order to reserve a spot in the budding field. Furthermore, once operation commences there is also going to be a state tax amounting to some 34 percent on the gaming revenue of each entity.
Taxes Prospects for the Field
What should be taken into account is that prior to the scraping of the PASPA there were numerous of businesses which were operating without any taxes being imposed on their activity. In this sense introducing rather high taxes in the new field could prove to stun its development before it has even started.
Such high taxes will make it impossible for the legally operating entities to compete with the already existing illegal ones, which in turn could prevent its growth from happening in the first place. The state of Nevada has had sports betting operation prior to the ruling of the United States Supreme Court and for reference, the taxes there amount to some 6.75 percent of the gaming revenue.
In addition to that, there is also the excise tax which amounts to as much as 5 percent that all states are obliged to pay. Some experts in the field even go as far as to claim that Pennsylvania’s taxes might be the highest one in the sports betting field on a global scale. In the meantime, the state of West Virginia voted for tax rate reaching 10 percent, which is generally the amount which most states interested in developing the sports betting field are striving to greenlight.