Pennsylvania sports betting may not meet with the same success as Nevada or New Jersey. Joe Asher, CEO of bookmaker William Hill US, isn’t betting it over the short-term. William Hill operates the sports books at Monmouth Park and Ocean Resort Casino as well as over 100 sports books in Nevada.

Pennsylvania casinos must first pay a whopping $10 million licensing fee. They’ll also have to pay a 36 percent tax on gross betting revenue — or the amount left after winners are paid. Asher believes that tax structure is a real challenge for the regulated Pennsylvania sports betting.

In West Virginia, the licensing fee is set at $100,000 followed by a 10 percent tax on revenue. Sports betting operations in New Jersey are subject to an 8.5 percent tax, while gross revenue from online operations is taxed at 13 percent. Casinos must also pay an annual $100,000 licensing fee, along with a one-time $250,000 retainer to be applied to regulatory costs.

The biggest threat of competition isn’t likely to come from neighboring states, Asher said. He’s more concerned about Pennsylvania’s black market — which doesn’t need to advertise the same way casinos or racetracks might in order to get people in the door and putting down money.

“The market will be limited largely to people who don’t have a bookie, currently,” Asher said.

He thinks Pennsylvania casinos will need to invest in special offers or amenities to convince people already betting illegally to come to their facility and do it legally. If revenue is being taxed at a high rate, Asher said Pennsylvania casinos might not be left with money to invest in such promotions.

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