The History Of Gambling In Pennsylvania

Gambling In Pennsylvania
The History Of Gambling In Pennsylvania

Pennsylvania has been one of the most conservative states about gambling and sports betting for a long time. However, in recent years, we have seen this situation has changed: By 2019, all kinds of gambling became legal within the state boundaries, and Pennsylvania is now considered to be the biggest rival of New Jersey. If we were to make a “top 3” list for gambling in the US, Nevada would definitely be in the first place, but we are not sure which state will be the second, New Jersey or Pennsylvania. In any case, it’s a good time to be a gambler in Pennsylvania: This state can meet all the demands of the players and bettors. Let’s take a close look at the history of gambling in Pennsylvania, shall we?

Illegal Sports Betting and Gambling For 100 Years

We can divide the history of gambling in Pennsylvania into two periods; before and after 1959. Before 1959, all gambling and sports betting activities in the state were considered illegal. In this respect, Pennsylvania was one of the most conservative states in the United States, and they even refused to organize a lottery. But of course, there were illegal sports betting and gambling all over the state – controlled by the mob, and tolerated by most city officials. Even after the gambling became legal, we can say that this situation continues: According to a report published in 2017, there are 40,000 illegal slot machines in Pennsylvania and high-stakes underground poker games are still being held. These activities are mostly organized in the basements of “clubs” and no matter how much measures are taken, it is not possible to prevent them. This is due to the fact that legal gambling licenses are very expensive. By 2019, a sports betting and gambling license in Pennsylvania costs $ 10 million and you have to pay 36% of your earnings every year, as an income tax. This prevents legal gambling from developing and offering new options. But, let’s continue to focus on the past for now.

In 1958, Pennsylvania’s revenues were extremely diminished, and the state was literally about to go bankrupt. As a solution, city officials offered a bill called “Race Horse Industry Reform Act”: This bill made horse gambling legal. Horse races were held in Pennsylvania until the 1800s, but the state decided that they were “illegal” in the early 1900s. With this bill, the situation was reversed: Live horse betting operators were now free to provide legal service.

The problem, however, was that there was no longer a horse race track in the state. By 1965, seven tracks were built and horse races returned to Pennsylvania. Meadows Racetrack was the first runway built and it still continues to serve today. With horse betting becoming legal, Pennsylvania earned a serious tax revenue and the state began to grow rapidly. In 1971, they even organized their first legal lottery and in 2002, they joined the Powerball network.

Horse Betting Opens The Way To Other Forms Of Legal Gambling

In 2004, a governor candidate, Ed Rendell, promised to legalize slot machines during his campaign. Rendell could not be elected, but he managed to present his plan as a bill. In some ways, the bill was quite limited: Only operators that offer live horse betting could get a slot machine license, and the license fee was extremely expensive. At that time, there were a total of seven horse gambling operators in Pennsylvania, and they were serving outside of the city. So if you wanted to play on slot machines, you should be prepared for a long journey.

Bill was accepted and, surprisingly, all horse betting operators applied for a slot license. Pennsylvania earned $ 1 billion in revenue from these licenses. The calculations indicated that tax revenues could be obtained from each operator was nearly $ 3 billion, at an annual rate. Operators demanded that their licenses not be limited to slot machines, and they should include licenses of other games too. In 2008, these demands were accepted with another bill: Card and table games became legal and there were now full-featured casinos in Pennsylvania. Moreover, they all continued to offer horse gambling services. But online sports betting and online casinos were still not legal.

The Expansion To Online Sports Betting and Gambling

It was necessary to wait until 2015 for these. In 2008 and beyond, the economic crisis in America affected every state as well as Pennsylvania. There was a need for additional sources of income, and the authorities have found the solution based on their past experience to integrate online sports betting and gambling into existing laws. In 2015, the law called “Expanded Gaming Bill” was voted. Pennsylvania was a very practical state: Instead of offering a new bill each time, they kept upgrading the 1959 horse betting act.

Acceptance of this offer was not so easy. A large part of the locals thought that Pennsylvania had turned into Las Vegas and they started protesting the law proposal. They were right in a way: in 2015, there were more than 20,000 slot machines and more than 5,000 game tables in Pennsylvania. Even New Jersey could not reach these numbers: Pennsylvania was second to Nevada in terms of gambling revenue and the number of games. (We can say that this situation continues today.)

However, the economic difficulties, as always, was the winner of this debate. In 2017, expanded gaming law was accepted and gambling’s online forms became legal too. At the moment, any operator wishing to set up an online casino or online sports betting site in Pennsylvania is free to do so. In this respect, we can say that Pennsylvania is one of the most liberal states because even states that accepted gambling as legal does not allow online casinos. There are no operators who apply for online licenses yet, because, as we mentioned above, the license fees are extremely high. However, we know that operators such as Sugar House, River Casino, Parx Casino, and Valey Forge are preparing for this license. Fantasy sports betting is already legal, so there is no need to make any changes. By 2019, Pennsylvania is at least as important as Nevada and New Jersey for the gambling industry in the United States, and it offers everything players need.


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