Question: I understand sports gambling may be legal in Pennsylvania as early as the start of the NFL season. I have an established business in Montgomery County and was curious whether I could apply for a license, and if so, what will be required to do so?

Answer provided by: Michael J. Lyon, Esq. from the law firm of Walsh Pancio, LLC

At the present time, no. While sports gambling is, in theory, “legal” in Pennsylvania, businesses that are not casinos are not eligible to obtain a license to operate a “sportsbook,” or any program for taking sports wagers legally.

In October 2017, Governor Wolf signed into law a massive expansion of gambling in Pennsylvania. The law legalized sports betting within Pennsylvania, but only if the then-existing federal ban on sports gambling was declared unconstitutional or otherwise struck down. When the Supreme Court decided in May 2018 that the federal ban—then known as the Professional and Amateur Sports Participation Act (PASPA)—was unconstitutional, sports betting in Pennsylvania became a potential reality.

The gaming expansion law provides that only holders of a “sports wagering certificate” may accept a bet or wager on a sporting event. The only entities permitted under the law to apply for such a certificate are those that hold licenses to operate slot machines in Pennsylvania. And the only such businesses entitled to hold slot machine licenses are Pennsylvania’s twelve casinos. Independent businesses, therefore, are not currently permitted to apply for licenses to operate sports gambling facilities. Should such a business attempt to operate a sports betting program without a license, the law provides substantial fines for doing so (potentially exceeding $1 million).

Since legal sports betting has existed outside of casinos in Nevada for several years, many have speculated that the legislature could eventually amend the law to allow non-casinos the opportunity to operate legal sports gambling programs in states other than Nevada as well. However, businesses hoping for an eventual change in the law should also understand the costs associated with operating a sports gambling program in Pennsylvania. Any entity who is approved to hold a sports gambling certificate must pay an initial fee of $10 million to the PGCB within sixty days of approval. Every five years thereafter, it must pay a fee of $250,000 to renew the certificate. And, the law imposes an effective 36% tax rate on gross sports gambling revenue taken in, which is payable on a weekly basis. Suffice to say, the cost of doing business in sports wagering in Pennsylvania will be significant.

Any business that intends to operate a sports gambling program will also need to abide by regulations that will be adopted by the Pennsylvania Gaming Control Board (PGCB). These regulations will set forth the rules for the conduct of betting and taking wagers inside the state. The PGCB will also regulate casinos and racetracks that choose to host a mobile betting platform, which will also those within Pennsylvania the opportunity to place bets from their mobile phones and over the Internet. Many temporary regulations have already been promulgated, with many more to follow in the coming weeks and months.

To date, no sports wagering certificates have been awarded by the PGCB, and there has only been speculation as to which, if any, of Pennsylvania’s 12 casinos will apply for a certificate and shoulder the costs of obtaining one. And while many regulators have set the beginning of the NFL season as a goal for the first legal wagers, no concrete timetable has been set. So, while sports betting will eventually become reality in Pennsylvania, the realities of when and where remain quite uncertain.

As with any important decision, business owners interested in sports gambling or any operations related to a gambling facility or program should consult with an attorney regarding the legal considerations of their situation.

To arrange a discounted ($40) half-hour consultation with attorney Michael J. Lyon, Esq., click here to email a Montgomery Bar Association LRS advisor (LRS@montgomerybar.org), or call 610-994-3656 during regular business hours (Monday-Friday, 9 AM-4PM). If contacting us by phone, please be sure to mention this attorney’s name and how you heard about us. Automated referrals to other Montgomery Bar Association member-attorneys in your area offering free or deeply discounted consultations through our service are available online anytime at RealLawyers.org.

More about this Montgomery Bar Association member-panelist (bio provided by this attorney prior to publication):

Michael J. Lyon, Esq. is an attorney with Walsh Pancio, LLC in Lansdale. He graduated from Villanova University and the Charles Widger School of Law at Villanova University. He is admitted to practice law in Pennsylvania and New Jersey. His practice focuses on civil and commercial litigation, as well as gaming and Internet law and regulation. He has exclusively worked in private practice since graduating from law school in 2009.

In every year since 2014, Mike has been selected for inclusion in Super Lawyers-Pennsylvania Rising Stars, a distinction awarded to just 2.5% of attorneys practicing in Pennsylvania. He is an active member of the Montgomery Bar Association, where he is Vice-Chair of the Young Lawyers’ Section and Chair of the CLE Committee, and the Pennsylvania Bar Association, where he is Vice Chair of the Gaming Law Committee. In his community, Mike has been a member of the Montgomery Township Planning Commission since 2015, was a founding member and continues to be an advisor to CrossFit Kanna in Ambler, and has been an adjunct professor at Villanova.

Mike has been happily married to his wife, Melinda, since 2011. He and Melinda are the proud parents of two children, Trevor and Natalie.

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