Pennsylvania legislators are eyeing a potential tax increase on sports betting operators to help the state’s budget deficit, but the idea is being met with plenty of pushback.
Key Takeaways
- No specifics on a potential sports betting operator tax rate hike have been released.
- The Sports Betting Alliance has been running a campaign in Pennsylvania and on social media opposing any increase.
- Keystone State lawmakers are reportedly looking to complete the budget by the end of the week.
Despite no word on exactly how much lawmakers could increase a rate that’s already one of the highest in the U.S. at 36%, the Sports Betting Alliance has already taken action with a campaign targeting the pitfalls of a tax hike.
The group that represents major U.S. sportsbooks - DraftKings, FanDuel, BetMGM, Fanatics, and bet365 - ran television advertisements in the Pittsburgh and Philadelphia areas claiming a tax hike could hurt the industry. The SBA’s ads compared potential tax increases to the rising prices at grocery stores and gas stations, according to the Pittsburgh Post-Gazette.
“They’re going after poker and parlays,” the SBA’s ad said.
Other messages opposing the tax hike have surfaced on social media through sportsbook partners.
Betting on sports is awesome. Don’t let higher taxes kill the vibe. pic.twitter.com/Ik9KQ7jkwc
— Big Cat (@BarstoolBigCat) November 12, 2025
Getting involved
The SBA is also asking customers to sign a petition asking lawmakers not to raise operator tax rates.
“Right now, state lawmakers are considering a tax hike on online betting, including sports wagering and casino games,” the SBA said on its website. “With unfair tax hikes like this, everyone loses - but especially customers!
“Pennsylvania already has some of the highest tax rates on legal online betting. Raising them even higher would hurt your betting experience, stifle innovation, and push players toward the illegal market - risking both state revenue and vital consumer protections.”
Clarity coming soon?
Of the 38 states currently operating legal sports betting, only six have higher tax rates than Pennsylvania. Operators in the Keystone State pay a 34% state tax and 2% local tax on adjusted gross revenue, but they are allowed to subtract promotional wagers from the revenue total.
The Pittsburgh Post-Gazette reports lawmakers discussed raising the rate in October as they try to work out a new budget. PennLive.com reports members of the House are scheduled to meet on Wednesday to continue toward a resolution. More about the potential tax increase could be known then. If a budget is agreed upon, it would be passed to the Senate. Lawmakers hope to have it done by the end of the week.
Growing trend
Pennsylvania isn’t the first state to flirt with this idea. Illinois went from a 15% tax rate on operators to a progressive structure in July 2024 that starts at 20% and goes as high as 40% based on revenue thresholds. A year later, lawmakers in the Prairie State added a 25-cent tax on the first $20 million in wagers for each operator, increasing to 50 cents thereafter.
New Jersey went from 13% on online sports betting operators to 19.75% on operator gross revenue this year. Ohio and North Carolina were among states that discussed raising operator tax rates this year but ultimately held steady.
