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 territory to ratify the US Constitution in 1787. The rectangular-shaped state sits in the northeast 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 million. 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 landbased 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 punt at 15 retail locations and have access to over 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 the overall revenue from licensed gaming operations hit an all-time high during the 2020/2021 fiscal year, driving the tax revenue for the past three years to a total of $1.7 billion. Expectations are that the local industry will witness further expansion as new licensed gambling sites emerge in the following years. Of course, all of this would have been impossible without the solid legislative and regulatory foundation Pennsylvania has.
Pennsylvania Landbased Gambling Laws
Section 5513 of Pennsylvania’s Crimes Code stipulates that all gambling activities are illegal unless they have been specifically authorized and licensed under the state’s legislation. Pennsylvania has several legal forms of gambling, all of which require the authorization of the state authorities.
Despite the fact landbased casinos have been legal for less than two decades, the Keystone State comes second to Nevada in terms of revenues from commercial casino gaming. Let’s have a look at some of the key laws that govern and regulate landbased 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 has made multiple attempts to legalize landbased casino gaming but all were unsuccessful until the introduction of the Race Horse Development and Gaming Act. It passed in 2004 and led to the establishment of the Pennsylvania Gaming Control Board, which regulates most gambling-related matters within the state.
The legislation allows licensed casino businesses to provide table games and slots and oversees pari-mutuel betting. Poker also belongs to the category of allowed table games, according to this law. The Act outlines the regulatory powers of the PGCB, sets out a licensing framework, and establishes the license fees imposed on landbased gambling operations.
Tax revenues resulting from slots, commercial casinos, and racetrack betting mainly go toward socially beneficial causes, including property tax relief and the development of the thoroughbred horse breeding sector.
Slot Machines at Racecourses
The Gaming Act also makes a distinction between several categories of permitted slot machines. Each category requires a separate operating license. Category 1 permits allow for the operation of slot machines at racecourses, with a ceiling of seven licensed facilities throughout the Keystone State.
Stand-Alone Landbased Casinos
Category 2 permits are intended for stand-alone landbased casinos and allow them to offer slots in specific cities and tourist destinations. Such operators can run no more than 5,000 machines at the same time. There should be a distance of at least twenty linear miles between the facilities with Category 2 slot permits.
Major Casino-Hotel Resorts
Category 3 slot licenses are available to major casino-hotel resorts that have 275 rooms or more. Another condition stipulates that only registered guests and patrons of the resort can gain access to the gaming areas. Facilities with Category 3 permits should be at least fifteen linear miles from one another. Holders of these permits can offer no more than 500 machines.
Other Laws on Landbased Gambling
Other legal forms of gambling in Pennsylvania, like lotteries and bingo games, are governed by separate pieces of legislation. We discuss 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 local state lottery whose purpose was to furnish property tax relief to elderly individuals in the state, and more specifically, to those aged 65 years old or higher. The state-run lottery also aimed to curb the illicit gambling operations that were taking place in some parts of Pennsylvania at the time.
The legislation lays out the requirements for the sale of lottery tickets, payout distribution, and the marketing of lottery products. It outlines the powers and duties of the Secretary of Revenue, who has the mandate to administer lotteries in the state. Pennsylvania allows for eight state-specific lottery types plus three multi-state types.
The legislation also determines the costs associated with lottery participation as well as the ticket prices. The law prohibits selling and reselling tickets at higher prices than the fixed ones outlined in the regulations. People found guilty of this misdemeanor will have to pay fines of up to $2,000. Section 309 prohibits the sale of lottery tickets to minors, i.e. under the age of 18 years. Agents who knowingly commit this transgression risk fines of up to $500.
The Pennsylvania Bingo Law
The Pennsylvania Bingo Law enables non-profit entities to run bingo games for civic or charity purposes. Section 303 contains a legal definition of bingo games, describing them as those played on a board with five rows all of which, bar the central one, have five figures. The central row contains four figures that spell the word “free”.
To conduct bingo, non-profit entities must pay an annual fee of $100 unless they run the games for brief periods not exceeding three consecutive days per year, in which case the licensing fee costs $15. The legislation disallows people under 18 to participate in bingo games without written permission from their parents or guardians. The prize per single charitable bingo game should be no more than $500.
The Local Option Small Games of Chance Act
The Local Option Small Games of Chance Act permits eligible non-profit entities to organize certain chance-based games with the aim of raising money for civic and charitable purposes. The games belonging to this category include raffles, punchboards, pull-tabs, pools (not counting sports pools), daily and weekly draws.
Licenses for the operations of such games are available solely to organizations, not to individuals. The legislation outlines the fees and licensing requirements for the conduct of these offerings, allowing for several types of permits – regular, monthly, and special.
Pennsylvania Online Gambling Regulations
October 26, 2017 was an important date in Pennsylvania’s history as it saw the General Assembly vote in favor of House Bill № 271, paving the way for the further expansion of the local gambling industry. Several days later Governor Tom Wolf signed the bill into law, but it was not until 2018 that the Expanded Gaming Act (as the legislation is also known) fully came into effect.
Pennsylvania Online Gambling Regulations
October 26, 2017 was an important date in Pennsylvania’s history as it saw the General Assembly vote in favor of House Bill № 271, paving the way for the further expansion of the local gambling industry. Several days later Governor Tom Wolf signed the bill into law, but it was not until 2018 that the Expanded Gaming Act (as the legislation is also known) fully came into effect.
Legal Forms of Online Gambling
Satellite Casinos Became Legal
Legal Forms of Online Gambling
The Act made several online gambling verticals legal, including online poker, table games, slots, and sports betting. It introduced adequate regulations of daily fantasy sports and authorized truck stops to operate video gaming terminals (VGTs). Each approved truck stop must house a convenience store and can run no more than five video gaming terminals. Airport gaming tablets also became legal with the passage of this legislation.
Under the Expansion Gaming Act, punters from the Keystone State can legally wager on collegiate and professional sports games as long as they do so at locally authorized sportsbooks. Locals have the option to punt in-person, via licensed mobile apps, or online. Philadelphia’s SugarHouse Casino took the first legal online sports wagers in May 2019.
Online sports betting is available to Pennsylvanians who are at least 21 years old and are located within state borders. They can fund their online accounts with debit and credit cards, among other payment options.
Satellite Casinos Became Legal
The legislation also contained provisions allowing for the launch of up to ten satellite casinos across Pennsylvania. These are smaller landbased casinos that can operate up to 750 slot machines and thirty table games. Regular license holders have the option to open such mini-casinos but require category 4 permits for the purpose.
The mini gambling properties must be located at least 25 miles away from venues that hold licenses belonging to categories 1 through 3. Municipal authorities can vote to allow or prohibit the launch of satellite casinos within their municipalities.
Social Responsibility and Advertising Policies in Pennsylvania
Licensed gambling operators in Pennsylvania can only provide their services to customers who are old enough to gamble legally, which means they must be 21 years of age. The minimum age for participation in authorized lotteries and pari-mutuel betting is 18 years old. In the interest of social responsibility, landbased venues must prominently display placards with information about addiction and the relevant 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 from the Keystone State can self-exclude themselves from casinos, fantasy sports betting, video gaming terminals, and interactive gambling. Those who gamble remotely can request self-imposed limits on authorized sites. The options typically include setting up spending, deposit, and time limits on one’s account. Self-exclusion lasts one to five years or a lifetime. Family members cannot place problem gamblers on the exclusion list, though. Requesting a temporary suspension is also possible for a preferred number of hours or days.
Gambling Advertising Policies and Restrictions
Landbased operators looking to market themselves must add problem gambling statements to their advertising materials and send them for approval to the PGCB’s Office of Compulsive and Problem Gambling. Online gambling businesses must also comply with the regulator’s requirements. Their marketing materials should never be misleading or contain incorrect information.
Taxes on Winnings
Players from the Keystone State must pay personal income taxes on their winnings at a flat rate of 3.07%. Note these rates apply to all gambling-related profits, including non-cash prizes like luxury cars, gift cards, or cruises. Non-cash lottery prizes are the only exception. Patrons of landbased casinos can use checks when purchasing chips to bet with, but only on condition they are valid and honored by their respective bank.
Regulatory Bodies in Pennsylvania
The Pennsylvania Gaming Control Board has the mandate to regulate, supervise, and license most authorized gambling activities in the Keystone State. This governmental agency came to be in 2004 and consists of seven board members, a chairperson and six commissioners. It also has three ex-officio (non-voting) members – the Secretary of Revenue, the Secretary of Agriculture, and the State Treasurer.
Fourteen divisions within the PGCB deal with various day-to-day issues. Among those are the licensing, sports wagering operations, gaming operations, and casino compliance divisions. Dealing with patron disputes and complaints is another responsibility of the Gaming Control Board.
Lottery Regulator
Harness and Pari-Mutuel Races Regulator
Lottery Regulator
Operating as part of the PA Department of Revenue, the Pennsylvania Lottery Bureau has the power to regulate all lotteries in the state, collect tax revenue, and disburse it to various public programs. Issuing permits for the sale of retail lottery tickets is also within its remit.
Harness and Pari-Mutuel Races Regulator
The racing industry in the Keystone State is represented by the Horse Racing Commission, which operates as part of the local Department of Agriculture. It oversees the sector under the provisions of Act № 7 (House Bill № 941), approved by Governor Tom Wolf in 2016. The Commission regulates both harness and pari-mutuel thoroughbred races, along with all related activities. It has a total of nine members, five of whom are appointed directly by the Governor.
Conclusion
Pennsylvania had an underdeveloped, not to say almost non-existent, gambling industry until the 2004 legislation gave the green light to legal racetracks, casinos, and slot halls. However, it was not until 2017 that the sector really took off thanks to the introduction of legal interactive gaming and sports betting.
Locals currently get to enjoy a decent enough range of legal gambling opportunities, including over a dozen brick-and-mortar casinos and around 19 interactive betting sites. Licensed sportsbooks in the state generated a betting handle of $760 million in November 2021 alone, so it is fair to say the future of the local industry is looking more than bright.
Self-Exclusion and Individual Limits
Problem gamblers from the Keystone State can self-exclude themselves from casinos, fantasy sports betting, video gaming terminals, and interactive gambling. Those who gamble remotely can request self-imposed limits on authorized sites. The options typically include setting up spending, deposit, and time limits on one’s account. Self-exclusion lasts one to five years or a lifetime. Family members cannot place problem gamblers on the exclusion list, though. Requesting a temporary suspension is also possible for a preferred number of hours or days.