Pennsylvania is not expecting a huge windfall from sports betting or online gaming, according to initial estimates reported for inclusion as revenue line items in the state budget.
According to a report in the Associated Press, negotiators working on a final state budget to be completed by next month estimate just $100 million in revenue from both new verticals—a far cry from the billions in revenue many sources have predicted.
The reason is cost—sports-betting licenses bring a $10 million initial fee, and the state plans to tax betting revenues at 36 percent, a figure deemed unworkable by many potential stakeholders. For online gaming, the $10 million full licenses have not drawn any takers so far, and the tax rate for online slots is a whopping 54 percent.
While some land-based casinos are expected to create sports books under the law, they are predicted to be loss-leaders in revenue, meant to being new players into the casino. Few casinos are expected to touch the costly online slot licenses.
