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Gambling interest groups are investing heavily in campaigns leading up to the Pennsylvania primaries this month.
The Super PAC Win for America, which receives funding from sportsbooks FanDuel, DraftKings, and Fanatics, has contributed over $5 million to Win for Pennsylvania.
The funds are mainly used to support the re-election campaigns of incumbents after successful lobbying efforts by gambling organizations to prevent an increase in the state’s sports betting tax. Pennsylvania currently imposes a 36% tax on sportsbook revenue.
The Win for America PAC predominantly backs Republican candidates. In Pennsylvania, the money has been used to support the campaigns of Senators Lisa Baker, Camera Bartolotta, and Chris Gebhard, as reported by Spotlight PA.
Sportsbooks Grateful For Tax Stability
Primarily, gambling companies are endorsing candidates who opposed raising taxes on the industry in the previous year’s budget discussions.
Following the budget approval without tax hikes, the Sports Betting Alliance (SBA) ran advertisements thanking Gebhard and Senate Majority Leader Joe Pittman for “supporting PA sports fans and resisting tax increases.”
The SBA, which includes the three sportsbooks funding Win for Pennsylvania, along with bet365 and BetMGM, argues that raising sports betting taxes would result in increased costs for consumers.
Similar scenarios unfolded in Illinois last year when companies passed on added costs to consumers due to a new per-bet tax. The SBA has taken legal action against the city of Chicago for imposing an additional levy on top of the new betting surcharge.
Potential for Esports Betting Expansion
Republican lawmakers have introduced bills to broaden legal betting in Pennsylvania, including permitting esports wagering.
Last year, Rep. Ed Neilson introduced HB1636, a bill that would legalize esports betting and grant the Pennsylvania Gaming Control Board authority to approve other events as deemed appropriate.
Although the legislation was referred to the House Gaming Committee in June last year, no progress has been made since then.
If the gambling-backed incumbents secure re-election, it could reignite efforts to authorize esports betting.
Regulating Esports Prediction Markets in Pennsylvania
Currently, residents can participate in esports prediction markets, but the state has proposed legislation to regulate this activity.
Last week, a group of Democrats introduced HB2497. The bill suggests imposing a $1 million license fee on prediction market platforms and levying a 20% tax on revenue.
The proposed legislation also empowers the Board to limit certain markets related to “sensitive topics” such as elections, military conflicts, court decisions, and natural disasters.
However, it does not seek to restrict esports or other markets related to sporting events.
Skill Gaming Industry’s Political Influence
Another significant player in the election is the skill gaming industry. Senator Bartolotta, supported by sportsbooks, has raised concerns about skill games proponents attempting to influence the Pennsylvania Senate through campaign expenditures.
Citizens Alliance, a conservative political entity mostly funded by skill game developer Pace-O-Matic, has allocated millions in campaigns against Bartoletta, Baker, and Gebhard.
Gebhard proposed a bill to regulate and tax skill games statewide. Cliff Maloney, CEO of Citizens Alliance, stated that the group is aiming to hold Senate Republicans accountable for proposing new taxes on certain small businesses.
Like Bartolotta, Gebhard expressed dismay at the external funding influencing the campaign against him. He remarked, “Considering the significant impact of third-party funding, we should perhaps evaluate whether this benefits the system and the people of Pennsylvania.”
The outcomes of the upcoming primaries will shed light on which group has strategically allocated its financial resources.