Online gaming and sports betting operators appear to be getting ready for a fight in Pennsylvania. Several companies are creating a super PAC and are budgeting millions of dollars to battle possible tax increases within the industry.
The PAC is expected to start with an initial $10 million in funding to support candidates and campaigns that would be opposed to tax increases, according to Legal Sports Report.
“Pennsylvania has rocketed to the top of the list of states where operators are looking to play big during next year’s midterm election,” a source told the website.
Turning Away The Taxman
Pennsylvania is a leader in online gaming and sports betting. In 2024, the state saw record gaming revenue of more than $6.1 billion, an increase of 7.7% from 2023. That included $2.2 billion from online gaming, a 25.3% increase from 2023. Sports betting brought in $510.7 million, an 11.4% increase.
The formation of the PAC comes as other states have also sought tax increases on the industry this year. Illinois passed a 25-cent tax on sports wagers for an operator’s first 20 million bets. That rises to 50 cents for bets beyond that threshold. In Louisiana, the state approved increasing the sports betting tax rate from 15% to 21.5%.
Operators appear to be looking to head off any increases in the Keystone State, which already has one of the highest rates in the country for sports betting at 36%. Online slots are taxed at 54% and online table games face a 16% levy. Any potential rate increases haven’t yet been revealed, but operators are hoping to get out ahead of it.
A Surging Industry
A recent study from the U.S. Tax Foundation found that the sports betting industry will continue to grow, but urged caution among legislators looking to raise taxes.
“The market for sports betting will likely continue to grow substantially,” the report notes. “Texas and California don’t yet permit legal sports wagering markets. With nationwide legalization, sports betting market volume could easily double. As the tax base grows, tax policy design becomes increasingly important. Rates should be low enough to pull participants out of black markets and into the legal, regulated markets.”
There are currently 39 states plus Washington D.C. and Puerto Rico that have legalized some form of sports gambling. 31 states offer online sports betting, and new betting sites are launched monthly.
