The real world costs of operating US sports betting in a fully legal market were given special attention by Joe Asher, CEO of William Hill US, during last week’s GiGse conference in Miami. Asher was speaking as part of a panel that was tasked with examining how transforming legal betting on sports might be for the US gaming landscape.

Explaining some of the cost implications, he told delegates: “I’d like to drill down a little bit more on tax rates to help explain it. There’s a quarter point handle on the tax from the IRS that partially translates into five per cent of revenue, given the Nevada hold percentage as we call it in the business. And then you pay a sliding scale in Nevada that caps out at 6.75 per cent. The effective tax rate is lower than that – call it six per cent in VAT.

“In Pennsylvania you’re going to pay $10m dollars up front for the privilege of then paying 36 per cent at the state level on top of the five per cent to the IRS. So you’re paying $10m up front to pay 41 per cent.”

Asher was also keen to emphasize the difficulties in dislodging an entrenched black market. By way of example, he said: “There is a deeply, deeply, deeply engrained black market in Pennsylvania. Customers have in many cases a hands-on relationship with their bookie. It’s very convenient, he offers credit.

More on US sports betting at SBC Americas