Pennsylvania’s gambling journey began in 1971 with the establishment of the state lottery under Governor Milton Shapp. 8 years after, in 1979, lottery employees were caught rigging the numbers in what became known as “the triple six fix.” This sad event obliterated the reputation of the gambling industry and with it – any efforts to establish other forms of betting in PA.

Restoring the damage took 33 years. in July 13th 2004, the “Pennsylvania Race Horse Development and Gaming Act” (Act 71) was signed into law by Governor Ed Rendell and approved by Senate allowing the establishment of 14 casinos at racetracks, which could offer slots (up to 5000 each), reel games, and video poker. Two years later Mohegan Sun Pocono Downs, opened its gates and made history in becoming the first PA casino to offer slots in the keystone state.

And Revenues? They followed but even those were not enough to support the ever-growing needs of the state. A good example of how gaming supports the state would be the introduction of table games to PA casinos: Table games were introduced to PA casinos in 2009 to help fill a budget gap and prevent layoffs of nearly 1000 state workers. At that critical moment, under experts’ advice, the government allowed casinos to expand game selection and introduce table games such as Blackjack, craps, baccarat, Texas Hold ’em and many more to Pennsylvanians, ultimately not only preventing layoffs but also creating nearly 10,000 new jobs.

In 2017, Act 42, the “Expanded Gaming Act” was signed into law by Governor Tom Wolf and approved by the Senate, paving the way for fantasy sports and online lottery betting, and eventually leading to the full legalization of casinos and sports betting in the state. The specific legalization for sports betting was made possible by the Supreme Court’s ruling that the PASPA (Professional and Amateur Sports Protection Act of 1992) Act was unconstitutional in 2018.

And the future? It is mini and bright.

Racetracks and Brick and Mortar PA Casinos establishments were just a part of the gaming Act. Under it The PGCB has given the authority to issue license auctions for 4 casino categories:

• Category 1: racetrack casinos – 7 licenses in total
• Category 2: Brick and mortar (standalone) casinos – 5 licenses in total
• Category 3: Resort casinos – 2 in total
• Category 4: Mini (satellite) Casinos – Up to 10 licenses in total

In early 2018 the PGCB launched its category four auction of mini casinos. To this day only five licenses were sold during the auction process. Originally the auction was tailored for the expansion of the standalone casinos but due to low auction participation rate and the fact three planned mini casinos never opened up (Foxwoods casino, Market 8 & Mount Airy) the PGCB allowed in 2020 for privately held companies with ownership interests to participate in auctions. on Jan 26^th 2023 the PGCB announced of the approval for a new privately held mini–casino at Nittany Mall (formerly known as Bon-Ton).

At the same time the PGCB also auctioned the placement of Video Gambling Terminals (VGTs) at truck stops with strict qualifications, including a minimum to sell at least 50K gallons of diesel per month by any operator. By 2023, over 60 VGTs have been set up across the state and over 15 terminal operator licenses were issued, generating a combined average of $1.5 million in monthly tax revenue. Smaller county reps, who are eager to join in on the VGT madness but unable to do so due to not meeting criteria, are promising to push for a change and eliminate fuel sales requirements. To sum it up, from traditional casino slots at mini-casinos to online Xpress sports by the PA lottery, table games expansion and more and more vendor interest it seems like the future of PA gambling looks brighter than ever.

The first PA online: According to the PGCB, The first online casino in Pennsylvania was Parx online Casino which went live on July 17, 2019. Followed by Penn National Race Course – Hollywood Online Casino (July 18, 2019) and Rivers Philadelphia Casino – PlaySugarHouse (July 19, 2019, transformed to BetRivers on January 30, 2020).

Since then, many other casinos have applied for operator licenses and brick & mortar partnerships to launch their online platforms in the keystone state. Amongst them are Mohegan Sun Pocono – Unibet (November 15, 2019), Valley Forge Casino – FanDuel Online casino (January 24, 2020), Harrah’s Philadelphia – Caesars (April 23, 2020) and Hollywood Casino Morgantown – BetMGM (December 4, 2020)

Under the 2017  Expanded Gaming Act, the PGCB divided gambling types into four main categories:

• Casino type 1 – Horse Racing Casinos:
  These facilities, also known as “racinos,” blend a racetrack with a casino and are primarily focused on horse racing but also offer a limited selection of casino games.
• Casino type 2 – Autonomous casinos:
  Independently operating brick & mortar Casinos, offering a wide range of Casino games and sports betting. In PA, all online casinos must have a Category 1 or Category 2 casino partnership. A rule to make sure all regulated online casinos follow land casino standards and are also held accountable for any action.
• Casino type 3 – Resort Casinos:
  “full-service” casinos attached to a resort or a hotel. Offering restaurants, bars, live shows, and everything a gambler needs for a good vacation. In short – The Pennsylvanian Vegas.
• Casino type 4- Satellite casinos:
  privately-owned establishments that offer video gaming terminals or other types of casino gaming, often located at truck stops or malls.

* All casino licenses in PA are granted by the Pennsylvania Gaming Control Board and regulated in accordance with state laws and regulations.

No matter if you have just the correct intel to parlay wager on sports, Pentafecta (Super Hi-5), your top 5 horses, or if today was your 777 lucky day at the racino slots – your winnings in PA are taxable by law. Your winnings are automatically deducted by the casino and will be reflected in a W-2G form which will be mailed to you and the IRS. But, it is every PA citizen’s personal responsibility to make certain winnings are reflected in their tax returns. Mainly because the house reflects a 24% flat tax rate, but the actual sum you owe is based on your tax bracket.

Keep in mind that every win above $5000 is also considered a source of income by the state and, as such, is subjected to an additional 3.07% Pennsylvania state personal income tax. As the old saying goes – “A person doesn’t know how much he has to be thankful for until he has to pay taxes on it.” Play clever, be thankful, and remember to fill out your forms.

Most Popular PA Gambling Activities: according to the PGCB January 18, 2023 report – Slots remained the most profitable vertical and the uncontested king of the keystone state gambling industry with a staggering revenue of $2.4 billion out of a $5.2 billion total revenue in 2022. To put this into perspective, the revenue generated from PA slot machines in 2022 exceeded the combined income from sports wagering ($401 million) and casino table games ($990 million). From our own research – People play different slots at online Casinos than they do in brick-and-mortar ones. That is due mainly to having a more comprehensive selection, bonuses, promotions, and, most important – the advantage of being able to collect game-related decisions such as RTP, paytable, Volatility, and min bet to ways of managing bankrolls or just testing free spins.

Although skill games may appear and function similarly to traditional slots, they have a crucial difference: the dimension of human skill plays a more significant role than pure luck. This has led to a gray area in the PGCB’s ability to regulate these games. As a result, skill games can now be found everywhere, from restaurants to dedicated gaming parlors. Unexpectedly, the arrival of these games has also started a new debate regarding the skill level required in traditional casino slots. As an example of this debate “Wheel of Fortune” slot bonus round features a word puzzle, which some argue requires a certain level of skill.

While these new games are in somewhat of a regulatory limbo, the main disadvantage is for the residents of Pennsylvania. If skill games are not subjected to taxation under the state’s gaming legislation, we all miss out on their potential revenue stream for the betterment of all.