Published on: November 13, 2025, 02:20h.
Updated on: November 13, 2025, 02:20h.
- Pennsylvania lawmakers abandoned plans to raise online sports betting taxes
- The gaming sector opposed the proposed tax increases
In Pennsylvania, discussions aimed at boosting funding through increased taxes on select gambling activities were dropped prior to the General Assembly approving a budget of $50.1 billion for the 2025-26 fiscal cycle.
Earlier this month, there were whispers about potential modifications to the state’s share of online sports betting revenues during private discussions in Harrisburg. Currently, online sportsbooks surrender 36% of their net profits to the state, along with a 0.25% federal excise tax on every wager.
As Governor Josh Shapiro (D) remains steadfast in his goal to secure resources for underfunded public schools while also expanding tax credits for low- to middle-income families, the politically fragmented General Assembly explored new revenue avenues.
Tax Hikes on Gaming Averted
Upon learning that the Republican-controlled Senate and the Democratic-led House were considering tax increases on mobile sports wagering, the gaming industry rapidly mobilized and financed a $10 million political campaign. Pennsylvania sportsbooks initiated TV and radio advertisements urging the public to reach out to their representatives and request a halt to any tax increases on sports betting.
Sportsbooks contended that they operate on tight margins and that the existing 36% tax is already significant. They warned that additional hikes could lead to diminished customer promotions and incentives, potentially steering some bettors towards illegal offshore sportsbooks.
The campaign seemed effective, as state lawmakers ultimately chose not to adjust online sports betting taxes.
Pennsylvania’s online sports betting tax rate ranks among the highest. Only New Hampshire, New York, and Rhode Island impose higher rates at 51%, with Delaware and Illinois close behind at 50%. Conversely, states like Nevada and Iowa have lower rates at 6.75%, Michigan at 8.4%, and Indiana at 9.5%, with no other state taxing sportsbook revenue below 10%.
Illinois has consistently raised its tax on sportsbooks since launching sports betting with a 15% rate in 2024. Today, along with a 50% tax, the state imposes a 25-cent fee on every bet, which increases to 50 cents after 20 million bets.
Proposals for higher taxes on the state’s medicinal marijuana sector were also discussed, but this so-called “sin industry” similarly avoided adverse impacts during budget negotiations.
“In a legislature divided by party lines, we have once more demonstrated that Democrats and Republicans can collaborate effectively to achieve progress for the people of Pennsylvania — reducing taxes, investing in education and workforce initiatives, supporting law enforcement, and fostering economic growth,” stated Shapiro.
The State of Sports Betting in Pennsylvania
Gaming revenues from sports betting in Pennsylvania have stabilized over recent years. During the 2022/23 fiscal year, oddsmakers achieved $491.9 million in winnings, followed by $486.5 million in 2023/24, and $487.6 million in 2024/25.
In the first nine months of 2025, bettors placed a total of $6,101,971,364 in wagers — both online and in-person. This marks a 6.4% increase compared to 2024, when the total was $5,734,367,057 from January to September. This represents a boost of over $367.6 million in betting activity.