Pennsylvania is one of the thirteen colonies that originally came together to form the United States of America during the War of Independence. It is monumental to American history as it also became the second state to ratify the US Constitution in 1787. The roughly rectangular state sits in the northeastern part of the country, bordering Maryland, West Virginia, Delaware, Ohio, New Jersey, New York, Lake Erie, and the Canadian province of Ontario.
The Keystone State, as Pennsylvania is also known, is the fifth most populous US state, with 13.1 million inhabitants as of 2021. The same year it accounted for approximately 3.7% of the national economy, with a nominal gross domestic product of $832 billion. Tourism, manufacturing, mining, and agriculture are among the state’s key industries.
Pennsylvania also has a well-developed gambling industry, with locals having legal access to various land-based and online betting activities, including casino gaming, sports wagering, lotteries, bingo, fantasy sports, and poker. As of the 2020-2021 fiscal year, the Keystone State is home to 14 retail casinos and 19 licensed online gambling sites.
Legal sports betting has also ramped up in recent years. Pennsylvanians can presently place wagers at 15 retail locations and have access to more than a dozen authorized online sports betting sites. According to the local regulator, the Pennsylvania Gaming Control Board (PGCB), the industry has gone from strength to strength over the past couple of years, with the online segment being a major growth driver.
The PGCB revealed in a report that overall revenue from licensed gaming operations hit an all-time high during the 2020-2021 fiscal year, bringing total tax revenue for the past three years to $1.7 billion. Expectations are that the local industry will witness further expansion as new licensed gambling sites emerge in the coming years. Of course, all of this would have been impossible without the solid legislative and regulatory foundation Pennsylvania provides.
Pennsylvania Landbased Gambling Laws
Section 5513 of Pennsylvania’s Crimes Code states that all gambling activities are illegal unless they have been specifically authorized and licensed under state legislation. Pennsylvania offers several legal forms of gambling, all of which require authorization from state authorities.
Although land-based casinos have been legal for less than two decades, the Keystone State ranks second after Nevada in revenue from commercial casino gaming. Below are some of the key laws that govern land-based gambling in Pennsylvania.
Race Horse Development and Gaming Act of 2004
Slot Machines at Racecourses
Stand-Alone Landbased Casinos
Major Casino-Hotel Resorts
Race Horse Development and Gaming Act of 2004
Pennsylvania’s legislature made multiple attempts to legalize land-based casino gaming, but all failed until the passage of the Race Horse Development and Gaming Act. Enacted in 2004, the Act established the Pennsylvania Gaming Control Board, which regulates most gambling-related matters in the state.
The legislation permits licensed casino businesses to offer table games and slots and oversees pari-mutuel betting. Poker is also classified as an approved table game under this law. The Act outlines the regulatory powers of the PGCB, creates a licensing framework, and sets the license fees imposed on land-based gambling operations.
Tax revenue generated from slots, commercial casinos, and racetrack betting goes primarily toward socially beneficial causes, including property tax relief and the development of the thoroughbred horse-breeding sector.
Slot Machines at Racecourses
The Gaming Act distinguishes several categories of permitted slot machines, each requiring a separate operating license. Category 1 permits authorize slot machines at racecourses, with a cap of seven licensed facilities across the Keystone State.
Stand-Alone Landbased Casinos
Category 2 permits are intended for stand-alone land-based casinos and allow them to offer slots in specific cities and tourist destinations. These operators may run no more than 5,000 machines at any one time. Facilities with Category 2 slot permits must be separated by at least twenty linear miles.
Major Casino-Hotel Resorts
Category 3 slot licenses are available to major casino-hotel resorts that have 275 rooms or more. Another provision stipulates that only registered guests and resort patrons may access the gaming areas. Facilities with Category 3 permits must be at least fifteen linear miles apart from one another, and holders of these permits may offer no more than 500 machines.
Other Laws on Landbased Gambling
Other legal forms of gambling in Pennsylvania, including lotteries and bingo, are governed by separate pieces of legislation. We explore them in more detail below.
The State Lottery Law of 1971
The Pennsylvania Bingo Law
The Local Option Small Games of Chance Act
The State Lottery Law of 1971
The State Lottery Law of August 1971 led to the establishment of the state lottery, whose goal was to provide property tax relief to residents aged 65 and older. The state-run lottery also sought to curb illicit gambling operations that were occurring in parts of Pennsylvania at the time.
The legislation details the requirements for the sale of lottery tickets, payout distribution, and marketing of lottery products. It outlines the powers and duties of the Secretary of Revenue, who is responsible for administering lotteries in the state. Pennsylvania now offers eight state-specific lottery types and three multi-state games.
The law also specifies the costs associated with lottery participation, including ticket prices. It prohibits the sale or resale of tickets at prices higher than those set in the regulations. Individuals found guilty of this misdemeanor face fines of up to $2,000. Section 309 forbids the sale of lottery tickets to minors, defined as persons under 18 years of age. Agents who knowingly violate this provision risk fines of up to $500.
The Pennsylvania Bingo Law
The Pennsylvania Bingo Law allows non-profit entities to run bingo games for civic or charitable purposes. Section 303 provides a legal definition of bingo, describing it as a game played on a board with five rows, each containing five figures except the central row, which has four figures and the word “free.”
To conduct bingo, non-profit entities must pay an annual fee of $100, unless they hold games for a short period not exceeding three consecutive days per year, in which case the licensing fee is $15. The legislation forbids individuals under 18 from participating in bingo without written permission from their parents or guardians. The prize for a single charitable bingo game may not exceed $500.
The Local Option Small Games of Chance Act
The Local Option Small Games of Chance Act allows eligible non-profit entities to organize certain chance-based games with the goal of raising money for civic and charitable purposes. Games in this category include raffles, punchboards, pull-tabs, pools (excluding sports pools), and daily or weekly draws.
Licenses for these games are issued only to organizations, not individuals. The legislation sets the applicable fees and licensing requirements, providing for three types of permits: regular, monthly, and special.
Pennsylvania Online Gambling Regulations
October 26, 2017, was a landmark date in Pennsylvania’s history, as the General Assembly voted in favor of House Bill № 271, paving the way for further expansion of the local gambling industry. Several days later Governor Tom Wolf signed the bill into law, but the Expanded Gaming Act (as the legislation is also known) did not fully take effect until 2018.
Pennsylvania Online Gambling Regulations
October 26, 2017, marked a pivotal moment in Pennsylvania’s gambling history, as the General Assembly voted in favor of House Bill № 271, paving the way for further expansion of the local gambling industry. Several days later Governor Tom Wolf signed the bill into law, but the Expanded Gaming Act (as the legislation is also known) did not fully come into effect until 2018.
Legal Forms of Online Gambling
Satellite Casinos Became Legal
Legal Forms of Online Gambling
The Act legalized several online gambling verticals, including online poker, table games, slots, and sports betting. It also introduced comprehensive regulations for daily fantasy sports and authorized truck stops to operate video gaming terminals (VGTs). Each approved truck stop must include a convenience store and may operate no more than five VGTs. Airport gaming tablets were likewise legalized under this legislation.
Under the Expanded Gaming Act, bettors from the Keystone State can legally wager on collegiate and professional sports as long as they place their bets at locally authorized sportsbooks. Residents may wager in person, via licensed mobile apps, or online. Philadelphia’s SugarHouse Casino handled the first legal online sports wagers in May 2019.
Online sports betting is available to Pennsylvanians who are at least 21 years old and physically located within state borders. They can fund their online accounts with debit or credit cards, among other payment methods.
Satellite Casinos Became Legal
The legislation also included provisions allowing up to ten satellite casinos to open across Pennsylvania. These smaller land-based casinos may operate up to 750 slot machines and thirty table games. Existing license holders can open such mini-casinos but must obtain Category 4 permits.
The mini venues must be located at least 25 miles from properties that hold Category 1 through Category 3 licenses. Municipal authorities may vote to permit or prohibit the launch of satellite casinos within their jurisdictions.
Social Responsibility and Advertising Policies in Pennsylvania
Licensed gambling operators in Pennsylvania may serve only customers who are legally old enough to gamble, which means 21 years of age. The minimum age for authorized lotteries and pari-mutuel betting is 18. In the interest of social responsibility, land-based venues must prominently display placards with information on gambling addiction and organizations that assist problem gamblers.
Self-Exclusion and Individual Limits
Gambling Advertising Policies and Restrictions
Taxes on Winnings
Self-Exclusion and Individual Limits
Problem gamblers in the Keystone State can self-exclude from casinos, fantasy sports betting, video gaming terminals, and interactive gambling. Those who gamble remotely may request self-imposed limits on authorized sites. Available options typically include spending, deposit, and time limits on one’s account. Self-exclusion can last from one to five years or be permanent. Family members cannot place someone else on the exclusion list. Players may also request a temporary suspension for a chosen number of hours or days.
Gambling Advertising Policies and Restrictions
Land-based operators that wish to advertise must include problem-gambling statements in their promotional materials and submit them to the PGCB’s Office of Compulsive and Problem Gambling for approval. Online gambling businesses must meet the same requirements. Their marketing materials must never be misleading or contain inaccurate information.
Taxes on Winnings
Players in the Keystone State must pay personal income tax on their winnings at a flat rate of 3.07%. This rate applies to all gambling-related profits, including non-cash prizes such as luxury cars, gift cards, or cruises. Non-cash lottery prizes are the only exception. Patrons of land-based casinos may use checks to purchase chips, provided the checks are valid and honored by their bank.
Regulatory Bodies in Pennsylvania
The Pennsylvania Gaming Control Board is responsible for regulating, supervising, and licensing most authorized gambling activities in the Keystone State. Established in 2004, the government agency comprises seven board members: a chairperson and six commissioners. It also features three ex-officio (non-voting) members: the Secretary of Revenue, the Secretary of Agriculture, and the State Treasurer.
Fourteen divisions within the PGCB handle various day-to-day issues. These include licensing, sports wagering operations, gaming operations, and casino compliance. The Gaming Control Board also resolves patron disputes and complaints.
Lottery Regulator
Harness and Pari-Mutuel Races Regulator
Lottery Regulator
Operating as part of the PA Department of Revenue, the Pennsylvania Lottery Bureau regulates all lotteries in the state, collects tax revenue, and distributes it to various public programs. It is also responsible for issuing permits for the sale of retail lottery tickets.
Harness and Pari-Mutuel Races Regulator
The racing industry in the Keystone State is overseen by the Horse Racing Commission, which operates within the Department of Agriculture. It regulates the sector under the provisions of Act № 7 (House Bill № 941), approved by Governor Tom Wolf in 2016. The Commission oversees both harness and pari-mutuel thoroughbred races and all related activities. It has nine members, five of whom are appointed directly by the Governor.
Conclusion
Pennsylvania had an underdeveloped, almost non-existent, gambling industry until the 2004 legislation gave the green light to legal racetracks, casinos, and slot halls. However, the sector did not really take off until 2017, when legal interactive gaming and sports betting were introduced.
Locals currently enjoy a solid range of legal gambling opportunities, including more than a dozen brick-and-mortar casinos and about 19 interactive betting sites. Licensed sportsbooks in the state generated a handle of $760 million in November 2021 alone, so it is fair to say the future of the local industry looks more than bright.
Self-Exclusion and Individual Limits
Problem gamblers in the Keystone State can self-exclude from casinos, fantasy sports betting, video gaming terminals, and interactive gambling. Those who gamble remotely may request self-imposed limits on authorized sites. Available options typically include spending, deposit, and time limits on one’s account. Self-exclusion can last from one to five years or be permanent. Family members cannot place someone else on the exclusion list. Players may also request a temporary suspension for a chosen number of hours or days.