Legalize Esports Betting, Urges Pennsylvania Lawmaker in Memo

Esports betting should be legal in Pennsylvania, says state Rep. Ed Neilson. So he’s asking his fellow lawmakers to co-sponsor a bill to make that a reality.

Neilson, D-Philadelphia, published a memo on Friday about legalizing esports betting. He sent the request to “all House members,” making his case for them to co-sponsor such a bill.

He wrote:

Last year, the esports industry was valued at $1.1 billion worldwide. In the coming years, it is estimated that the esports industry has the potential to generate nearly $1.8 billion in economic activity. Philadelphia is currently building a multi-million dollar facility strictly dedicated to esports gaming that will attract worldwide events, the first of its kind in the United States.

To capitalize on this up-and-coming industry, in 2021 New Jersey passed legislation to legalize gambling on esport sporting events, such as video game tournaments. Similar legislation is being considered in other states. I believe Pennsylvania should quickly add esports to our gaming portfolio, bolstering our economy and the attendant tax revenue. Therefore, I am introducing legislation to legalize betting on esports in Pennsylvania.

Neilson hasn’t yet introduced any legislation during this session.

New Jersey, however, still has bills pending in the House and Senate that aim to move esports betting from sports betting into its own category. The last actions on each happened in September 2022. Meanwhile, esports betting is already legal and regulated in the Garden State.

Nevada is one Nevada Gaming Commission (NGC) approval away from regulating it.

Esports Betting in Pennsylvania

Neilson’s esports betting memo sounds like it’s emphasizing a particular Pennsylvania’s online gambling tax rate, which is 54%.

That’s the highest tax rate on online gambling in the Keystone State. It applies to Pennsylvania online casino slots.

Although Pennsylvania taxes table games at 17% and online slots at 54%, the state continues to bring in the most online casino revenue among US online casino jurisdictions.

Neilson writes:

The citizens of Pennsylvania are 54 percent stakeholders in the Pennsylvania gaming industry due to our stringent regulations and citizen-focused tax rates.

However, taxing esports betting at that rate may not appeal to many brands.

It’s more likely that Pennsylvania might tax esports like sports, which has a tax rate of 36%.

The only brand that’s launched in the US, Vie.gg, shut down after a few months. The brand’s owner said that New Jersey classifying esports as sports betting resulted in licensing and other costs being too high.

Philadelphia Esports Facility Downsized

On Jan. 3, Technical.ly reported that Philadelphia’s professional Overwatch League team, the Philadelphia Fusion, is being rebranded and moved to Seoul.

Also, the team’s owner, Comcast Spectator, changed plans for the $50 million, 3,500-seat, purpose-built esports arena in South Philly to a smaller, multi-purpose arena.

So the facility Neilson mentioned in his memo on Friday is still planned but isn’t esports-only.

2 Major North American Esports Brands

Despite the Vie.gg and Comcast Spectator setbacks, it does seem as though there is growing excitement about esports betting.

Online gambling brand Entain, known in US online casino circles for jointly owning BetMGM, relaunched Unikrn on Dec. 1. Gamblers can bet on the site in Brazil and everywhere in Canada but Ontario.

BetMGM, co-owned by MGM Resorts International, is the US online casino market leader. Unikrn hasn’t yet launched in America.

Also, not yet in the US, Rivalry is expanding in Ontario. The esports betting brand announced today that it will add online casino games “in the coming months.”

Nevada Regulators Close to Allowing Launch

On Jan. 26, the Nevada Gaming Commission (NGC) was expected to consider esports betting recommendations from the Nevada Gaming Control Board (NGCB). Approval would’ve meant launches could begin in the state.

On Jan. 11, the Las Vegas Review-Journal reported that after an NGC vote, “the regulation would take effect immediately.”

However, the NGC’s two-hour-long meeting didn’t include action on allowing “books to accept wagers on esports events in the manner of traditional sporting events.”

That quote summarizes part of what the NGCB decided to pass on to the commission after the board heard from the Esports Technical Advisory Committee (ETAC).

ETAC recommended:

To explicitly include Esports within other events; to allow books to accept wagers on Esports events in the manner of traditional sporting events if the books fulfill certain due diligence requirements; to specify the record-keeping and notice requirements for books which decide to accept wagers on Esports events; to grant the Board Chair authority to revoke or suspend a book’s decision to accept wagers on events conducted by certain Esports event operators; to set out the review process if the Board Chair revokes or suspends a book’s decision to accept wagers on events conducted by certain Esports event operators; to explicitly authorize the Board Chair to place Esports event operators on the list of sanctioning organizations; and to take such additional action as may be necessary and proper to effectuate these stated purposes.

So, for now, only New Jersey allows legal esports betting. However, no operators offer it. That could quickly change if Nevada or Pennsylvania take action soon.

About the Author

Heather Fletcher

Heather Fletcher

Heather Fletcher is Lead Writer at Bonus, concentrating on online casino coverage. She specializes in breaking news, legislative coverage, and gambling marketing strategy overviews. To reach Heather with a news tip, email [email protected].
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