Greedy lawmakers – and the rich get richer

The MGM Grand Race & Sports Book in Las Vegas, the city where wallets are flushed and dreams are crushed. And that's a warning for when Pennsylvania's first sports books open. - (Photo / Mike Russell)

Yes, legally betting on pro sports is now allowed in the U.S., thanks to the Supreme Court decision this month.

But don’t expect to see very many sports wagering sites in Pennsylvania, except for at casinos.

It’s because of greedy Pennsylvania legislators.

The state Legislature – sensing the Supreme Court’s inclination – already had established a $10 million licensing fee for sports books in Pennsylvania.

It’s an outrageous up-front fee that will keep many small and mid-sized entities from jumping into the game, so to speak.

Consider, also, that sports books don’t rake in nearly the revenue hijacked by slots and table games at casinos. For example, all 192 Nevada sports books take in only $250 million in revenue a year. Even if every last cent of that $250 million is profit – which it isn’t – that equates to only about $1.3 million of revenue per year per sports book.

On top of that, Pennsylvania installed a 36 percent tax on all sports wagering revenue – and that’s revenue, not profit.

Already, the profit margin for sports books is not that high. Their goal is to get the same amount to be bet on opposing teams in a game so that they are not vulnerable to a big loss. They make most of their profit on the vig, typically the 5 or 10 percent charge on the amount of your bet.

Coupled with the 36 percent revenue tax, it could take decades for sports books in Pennsylvania to recoup that massive $10 million licensing fee.

Which means that likely only cash-rich casinos will pony up to play.

Once again, the little guy gets the shaft. It’s called Government 101 and taught to every politician the moment he or she takes the oath of office.

Footnote: On the other hand, limiting the number of sports wagering sites is a good thing in terms of social consciousness. It could help to prevent gambling addiction, an insidious disease.

That is, until sports books start accepting bets over the phone.

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