Pennsylvania Lawmakers Propose Legal Esports Betting
Esports wagering could soon be coming to Pennsylvania, if State Representative Ed Neilson (D-174) succeeds in his efforts to pass Bill HB733.
Although online sportsbooks have been legal in the state since 2017, each new sports market has to be carefully assessed by regulators before approval. Politicians in the Keystone State have shown little appetite for adding esports (or competitive video games) wagering to that list.
However, the growing market for such bets has caught the attention of some. Esports betting, featuring professional teams playing popular video games like Counter-Strike, League of Legends and Fortnite, is estimated to gross some $1 billion globally in sports betting revenue each year.
The online gambling market in Pennsylvania already brings in $150 million a month or so, with February 2023 marking a high of $162.3 million in revenues.
Adding esports to the pie could see that rise, which is a potential coup not lost on Rep. Neilson.
“I believe Pennsylvania should quickly add esports to our gaming portfolio, bolstering our economy and the attendant tax revenue,” he said in January 2023.
The House Representative has been campaigning on this issue for a while. He has previously pointed out the success of esports betting in neighboring New Jersey, as well as the ongoing expansion of esports venues and tournament facilities in Philadelphia.
The first version of this latest proposal, HB69, was tabled at the beginning of March 2023. Four amendments have been made since then, and now HB733 is reportedly ready for a General Assembly vote.
However, despite the billion-dollar market potential, esports betting is controversial for a few reasons.
Firstly, the general audience skews younger. Secondly, because of the speedy reaction times required, many players are also very young. In fact, in some professional leagues (such as the League of Legends Championship Series), promising players debut at 16-years-old.
This can create a problem in markets like Pennsylvania, where all participants in betting activities (including the players being bet on) must be over 18.
Then there’s also the tax rates associated with sports betting. According to this new proposed legislation, esports betting providers would pay a flat rate of 36% tax. That’s the same as other legal casinos and sportsbooks in the state.
This could make the proposal less interesting to sportsbooks, as the esports betting market has its own challenges already. Partly because dedicated young fans can exploit old-school operators, who sometimes add competitive gaming markets without understanding the fast-moving field as well as they do more traditional sports.
Then there’s also all the tried and tested arguments against the expansion of online gambling. For example, a recent report published in the Philadelphia Inquirer suggested that nearly one third of Pennsylvania gamblers feel they have had a problem with their betting behavior in the past three years.
With that in mind, opening up to a new market that clearly skews to a younger audience could be a tough sell in the Assembly chambers. There is also no definite time line in place as yet for when Rep. Neilson’s latest esports betting bill will hit the Assembly proper. So, esports fans in the Keystone State shouldn’t hold their breath for legal betting anytime soon.