Despite the fact that sports betting is only beginning to establish its footing in the United States, one company is already making moves towards completely revolutionizing sports betting in the country. PointsBet, the company in question just recently set up new offices in Jersey City and is currently preparing to launch its operations in New Jersey this November. With its unique “spread betting and “points betting” feature, the Australian company is set to disrupt the country’s sports betting industry since it will be offering a product that none of its competitors can offer at the moment.
PointsBet is so confident in its news offering that even prior to its launch, it is already envisioning expansion plans to extend its presence beyond New Jersey – its officials have maintained open communication lines with representatives from other states as the company prepares to grow further in the nascent legalized sports betting market.
Unfortunately, as much as the operator intends to have a national footprint in the United States, Pennsylvania is not part of those plans and the reason is not surprising at all.
High Pa. Tax Rates Not Favorable
PointsBet’s point betting feature is going to be a key factor in its success in the US – the feature essentially uses traditional formats as the foundation on which its customers have the potential to either win or lose big. For instance, players can place a $10 bet on the over of an NBA game with an over or under point total of 200. For each and every point beyond the total, the payer gets to walk away with $10 and for every point less, the player loses $10.
According to PointsBet, this would best work in a place where the tax rates are not as aggressive as it is in the Commonwealth. Citing, the 36 percent tax rate and the $10 million licensing fee as well as concerns regarding offshore black-market illegal bookmakers, PointsBet chose to hold off on any future plans to venture into the state’s gaming industry.
“The tax there is very onerous. … But to go and bid for a Pennsylvania license, I’m not so much concerned about the $10 million upfront (licensing) fee, but those operating taxes, which when you average it all out tips over 40 percent, it makes it very hard for us to enter, be aggressive on our offers and price, all the things we need to do to try to win money back from the black market,” PointsBet US CEO, Johnny Aitken said.
It is still very difficult to tell how close it is, but the Keystone State has been moving purposefully towards the launch of its highly anticipated legal online and sports betting industry. Till then, there are a number of issues that will hopefully be ironed out to ensure that the industry is sustainable for both the gamblers and the gaming operators.