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The casino, which is owned by Caesars Entertainment, paid $10 million to the Pennsylvania Gaming Control Board as part of its application. There is no solid timeline for the approval of the application.
Harrah’s joins Parx Casino and Hollywood Casino as the only Keystone State casinos that have applied. Parx also asked for its South Philadelphia Turf Club off-track betting venue to be able to offer Pennsylvania sports betting.
Harrah’s only the third because of licensing fee and tax rate
The casinos in Pennsylvania have had the opportunity to apply for licensing since April 16. However, it wasn’t until mid-August that any casino even bothered.
Now, on the cusp of October, only three out of 13 possible applicants have filed. Given Pennsylvania’s size and population, there should be more enthusiasm.
Unfortunately, the Pennsylvania Gaming Control Board enacted two rather onerous provisions as part of its regulations. The first is the licensing fee mentioned above.
A $10 million licensing fee is far in excess of what casinos in neighboring states must pay. In both West Virginia and New Jersey, casinos must pay $100,000 to apply – a scant one percent of Pennsylvania’s figure.
The tax rate on sports betting is also prohibitively high in Pennsylvania. At 36 percent, it far outstrips the 10 percent and no more than 13 percent in West Virginia and New Jersey, respectively.
In fact, the only state with a higher collection rate is the soon-to-open Rhode Island. However, Rhode Island provides both of its casinos with an unprecedented level of support, which somewhat justifies the exceptional rate.
Online gambling is making progress in Pennsylvania, though
Even though sports betting is moving slower than desired in Pennsylvania, a third applicant certainly signifies progress. Harrah’s likely felt a certain degree of competitive pressure from its nearby neighbors and was obliged to throw its hat in the ring.
Harrah’s management also knows that things are proceeding in the online gambling market at a faster rate than sports betting. As such, there is a hustle to be first to market right now.
At this moment, only two casinos in Pennsylvania have not applied to offer online gambling of some kind. Most, like Harrah’s, applied for a $10 million deal to receive licenses for online slot play, online table games, and online poker.
So far, five casinos have received approval for their applications. Harrah’s is one of the five, but Parx and Hollywood are also in the group.
At this point, for those five, the only thing holding them back is logistical. They are all huddling with their strategic partners to figure out how to release a site.
So, we may be seeing a bit of a three-way arms race around the Philadelphia area. We’ll just have to wait to see who comes in first.
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