by Hazel Trice Edney
(TriceEdneyWire.com) – In May 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), a 25-year old federal law that essentially prohibited commercial sports betting outside of Nevada. Since that landmark decision, 12 other states have passed legislation to allow sports betting, including Pennsylvania, where $109 million was wagered on sports in August alone, most of it taking place online.
Pennsylvania’s burgeoning sports betting market is expected to become an integral part of the state’s robust and growing gaming industry, which has supported more than 33,000 jobs and generated $2.5 billion in taxes over the past 15 years. Many believe that it could lead to an uptick in hiring, providing a boost to local communities and opening up more opportunities for diverse working families with various levels of education. Roughly 66 percent of the state’s gaming industry employees do not have a four-year college degree – 38 percent are racial minorities and 43 percent are women.
But while sports betting in Pennsylvania brings great promise, it is facing a number of challenges that could undermine its potential positive impact. Chief among them is the threat posed by largely unknown and potentially unscrupulous foreign companies vying for state contracts.
Case in point is the quiet entrance of a Malta-based international online gambling and sports betting conglomerate called SBTech into the Pennsylvania market. In July, the company launched a sportsbook at Presque Isle Downs and Casino in Erie, operating more than 50 sports betting kiosks on the property.
In a press release announcing the launch, SBTech US President Melissa Riahei said, “We’ve continued to rapidly expand across the US in the last year as the sports betting provider of choice for several major operators around the country.” Signaling plans for expansion in the state, Riahei said, “We are excited to launch in Pennsylvania…and look forward to becoming a key player in the emerging Pennsylvania sports betting market.”
While the company has yet to garner much attention or scrutiny in Pennsylvania, it has been under fire in Oregon, where it was recently awarded a three-year, $27 million-dollar contract to provide the technology that will power all mobile sports betting in the state. During the bidding process, allegations surfaced that the company operates in countries where betting is outlawed, including in China. SBTech is also alleged to have ties to Turkey and Iran.
According to The Oregonian, the company denies the allegations that it operates in countries where gambling is illegal: “To be very clear, SBTech does not operate in any black markets.”
It remains to be seen if SBTech will be forced to answer similar questions from lawmakers and regulators in Pennsylvania as it tries to spread its reach. But observers say that policymakers in other states where lucrative contracts are up for grabs are watching closely. More broadly, they say that because sports betting is just getting off the ground in the US – and because many lawmakers are scrambling to get up to speed on the relevant issues – what happens now could shape the landscape for years to come.
Communities that have welcomed sports betting in Pennsylvania for its promise of new jobs stand to be the first and most direct beneficiaries of a strong and stable market. But they also could pay the price for missteps.