By Benjamin Norman
In 2018, the U.S. Supreme Court struck down a federal statute that prohibited states from authorizing sports wagering.[1] Following this ruling, gambling companies and casinos developed sportsbooks and mobile apps that provide individuals the ability to place bets on sporting events. As of April 2021, 28 states have permitted some form of mobile or in-person gambling.[2]
Pennsylvania authorized sports wagering in a bill that took effect upon the Murphy ruling.[3] Under the Pennsylvania law, a sports wagering certificate is needed for an entity or licensee to conduct any sports wagering operations.[4] To apply for and receive a sports wagering certificate, a company must have a slot machine license that has been awarded by the gaming control board. § 13C12. Furthermore, under the current law sports wagering can only take place at the facility of the licensee, at a temporary facility, or on the internet. §13C21. The temporary facility requirement is limited to a place connected to, attached to, or adjacent to a licensed facility.[5] The result of these provisions is that nearly all sports wagering occurs on the internet or at casinos.
Senator Wayne Fontana (D-Pennsylvania S.D. 42) [ST1] has introduced legislation that would expand the location requirement of §13C21 and also allow for the restaurant industry to benefit off of the success of the sports wagering industry.[6] The bill would amend the current law by allowing companies that are currently able to obtain a sports-wagering certificate to apply for a tavern sports wagering certificate.[7] The tavern sports wagering certificate would allow the licensee to conduct operations at a tavern. In the application for such a certificate the petitioner must comply with the amended § 13C12. A certificate will be granted if the petitioner can show by clear and convincing evidence an economic benefit to the community, that petitioner has the adequate funds for the operation, and other criteria set out in §13C13.
But what constitutes a tavern? And how will operations take place at a tavern? The bill defines a tavern as “a restaurant licensee or club licensee with a valid license to sell liquor and malt or brewed beverages under… the Liquor Code.”[8] Licensed taverns that want to take part in sports wagering must enter into what is labeled a “placement agreement” with a company that is granted a tavern-sports wagering certificate.[9] The agreement authorizes companies to place kiosks inside the tavern that would allow for customers to place bets. Furthermore, the bill would require placement agreements to stipulate that taverns are entitled to a minimum of 25% of the gross returns from the kiosks.[10] The placement agreement also requires a minimum term of 60 months. Id. These last two provisions allow taverns to raise a significant amount of money and keep that stream of revenue for a significant amount of time.
While waiting to see whether the legislation gets passed, a tavern owner may want to get in touch with companies that currently have a sports wagering certificate and discuss possibilities of placing kiosks in their establishments.
[1] Murphy v. National Collegiate Athletic Ass’n, 138 S. Ct. 1461, 1484-1485 (2018).
[2] Ryan Rodenberg, United States of sports betting: An updated map of where every state stands, ESPN (April 7, 2021), https://www.espn.com/chalk/story/_/id/19740480/the-united-states-sports-betting-where-all-50-states-stand-legalization.
[3] 4 Pa. Stat. and Cons. Stat. Ann. § 13c01-71 (West 2021).
[4] §13C01
[5] Id.
[6] S. 843, 2021-2022 Leg., 250th Gen. Assemb. § 13C01-13C61 (Pa. 2021).
[7] Pa. S. 843 at § 13C01.
[8] Pa. S. 843 at § 13C01.
[9] Pa. S. 843 at § 13C17.
[10] Pa. S. 843 at § 13C17.
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