PENNSYLVANIA - Setting up a new online gambling business is not for the faint of heart, but for those who take the plunge, the rewards are sure to be fruitful. The US online gambling market has been on the up and up over the last decade, and it is expected that more states will continue to join the trend over the coming years.
Pennsylvania became the fourth US state to legalize online gambling in 2017, when Governor Tom Wolf signed the Truck Stop and Satellite Casino bill into law. Eight years later, the benefits are clear to see. By April 2025, the State gambling revenue had risen 10.7% year-on-year to $558.7 million, driven in no small part by the iGaming market.
The Keystone State is the only one to offer both gaming and lottery tickets online. For those interested in setting up their own online gambling business, Pennsylvania is a land of opportunity. Nowhere in the state is that truer than in its most populous city, Philadelphia. New businesses can capitalize on Philadelphia's high customer potential by leveraging clever marketing and the latest technologies, such as AI.
First, let's lay out the options for launching an online gambling business in Philly. Online casinos and online sportsbooks are popular choices. While the state does offer an online lottery, this is managed solely by the Pennsylvania Department of Revenue, so it is not an option for operators looking to expand their business operations in the state.
Online casinos are legal in Philadelphia, and most licenses are tied to land-based casinos. This is the more traditional business model, in which an online operator partners with one of the State brick-and-mortar casinos to launch a website. The physical casino brings the all-important license, while the online operator leverages its expertise.
For a long time, striking a market-access agreement with an existing land-based casino was the only way to obtain a license for an online casino in Pennsylvania. That is no longer the case. In 2023, the Pennsylvania Gaming Control Board, which regulates the State gambling market, opened a licensing scheme for Qualified Gaming Entities without ties to a land-based casino.
QGEs were able to obtain a certificate to operate online slots, table games, poker, or a combination thereof at a specified cost per vertical. Each certificate costs $4 million. QGE licenses in Pennsylvania do not extend to sports betting – but more on that later.
Those interested in setting up their own online gambling business in Philadelphia may find it useful to compare online casinos licensed via market-access agreements with those that have taken the QGE route. Parx Online Casino PA and BetRivers Casino PA were both launched through skin agreements with land-based partners. Bally was the first operator in Philadelphia to receive a standalone QGE license, followed later by Golden Nugget.
Any new start-up looking to launch a venture in Philadelphia would benefit from conducting market research into the State most successful online casinos. Casino.org has collated a list of the best PA online casinos in terms of their portfolios, bonuses, and trustworthiness. Its guide is aimed at players, and effectively illustrates what Pennsylvanians are looking for in their online casinos.
Online sports betting businesses in Pennsylvania must also obtain an operating license from the PGCB. Like online casinos, these are often linked with a land-based casino or racino. Under current PGCB rules, each certificate holder may have only one sportsbook skin (website) for online sports wagering.
So, the first step for any enterprising online betting business is to submit an Enterprise Entity Application and Disclosure Information Form to the PGCB. The license fee must then be paid and renewed every five years. Licenses are reported to cost approximately $10 million. To operate the online sportsbook, you need to apply as a Sports Wagering Operator before undergoing background checks.
The online sportsbook must meet high technical, security, and compliance standards. This includes implementing age and ID verification, responsible gambling tools, data security, and fair-play controls. Geolocation verification is vital to ensure that all bettors are within Pennsylvania when placing bets.
Businesses must comply with ongoing regulatory, tax, and reporting obligations. In Pennsylvania, online sportsbooks must pay substantial taxes on gross revenue. For betting operators, that figure lies at 36%. Audits, data-security reviews, and compliance monitoring by the state regulator are to be expected, too.
At present, online-only sportsbooks are not permitted under current law. That means that the requirement for a casino-linked certificate holder is essential. While the initial $10 million licensing fee is steep, as is the tax rate, there are plenty of benefits to be found in running an online sportsbook in Philadelphia.
Pennsylvania's online sports betting market is large and continuing to expand. In August, the statewide online sports betting handle exceeded $515 million. Online sportsbooks have a dominant share of the betting market, indicating that punters prefer placing bets online. IGaming on the whole is a high-revenue sector in Pennsylvania, and it is clear that there is a strong appetite amongst residents for online gambling products.
While the State established a legal framework and regulations might pose difficulties for new businesses, they do reinforce public trust and reduce any risks posed to players. This framework means that any new online gambling business launching in Pennsylvania is entering into a vetted system.
Player trends show that the shift towards online betting and gaming is continuing to grow. Online gambling businesses offer customers a degree of convenience, spontaneity, and accessibility that is not possible at land-based counterparts. This shift can also support sportsbooks and online casinos looking to scale more easily, as they can reach broader demographics and attract those who would not normally visit a casino or betting shop.
Philadelphia offers its own strategic advantages to any new online gambling business looking for a base in Pennsylvania. Its large population means more potential customers, stronger brand recognition, and greater market share. Urban populations tend to adopt digital services quickly because of their convenience.
Any new sportsbook will benefit from the dense concentration of sports fans. This can drive volume, especially during peak sports seasons. There is also potential for lucrative partnerships with local sportsbooks and casinos, which will help with marketing, building trust, and brand loyalty.
