Pennsylvania’s sportsbooks and online casinos extended their momentum in January, opening 2021 with more than $600m in monthly sports wagers for the first time while setting a fresh record for online casino revenue.
With a positive start to the year, Pennsylvania’s sportsbooks are on the path to bring nearly $6bn in sports wagers in 2021 with the state’s online casinos capable of reaching more than $800m in taxable revenue, according to projections from analysts PlayPennsylvania.
The state’s online and retail sportsbooks took yet another leap forward in January with $615.3m in bets in January, up 76.6% from $348.4m in January 2020 and toppling the record $548.6m in wagers set in December.
Those bets produced $34m in taxable revenue, up 49.1% from $22.8m in January 2020. The benefit to the state has been profound. In January, sports betting yielded $11.5m in state taxes and $679,408 in local share assessments.
Since launching in November 2018 with by far the highest tax rate among US legal sports betting jurisdictions, Pennsylvania sportsbooks have produced $111.7m in taxes. Only New Jersey — the nation’s largest legal sports betting market and more than a year older than Pennsylvania’s — has crossed $100m in tax revenue. Nevada is the only other state to surpass even $50m in tax revenue since 2018, when legal sports betting began to spread beyond the Silver State.
“A return to relatively normal — with a healthy retail market and a dependable sports schedule — would be enough to fuel growth in Pennsylvania’s gaming industry,” said Dustin Gouker, lead analyst for PlayPennsylvania.com. “There are a lot of positive signs right now as sportsbooks and online casinos continue to gain steam, and hopefully, the state’s brick-and-mortar casinos begin to regain their footing. If things do return to normal, the gaming industry should see significant gains across the board in 2021.”
Online sports betting produced 94.3%, or $615.3m, of January’s handle. With retail books reopened in January, that was down from 97.6% of December’s handle.
FanDuel Sportsbook/Valley Forge Casino topped the market again with $220.7m in online bets, up from $207.6m in December. Those bets produced $14.3m in taxable revenue, up from $7.1m in December. DraftKings/The Meadows was second with $143.5m in bets, up from $130.9m in December, yielding $7.7m in taxable revenue.
Fueled by the Barstool-branded app, Penn National/Hollywood Casino fell to $65m handle, down from $71.8m in December. That produced $1.1m in taxable revenue, down from $13.9m in December.
“Pennsylvania’s tax structure did slow down the early progress of the industry, but the high tax rate no longer appears to be much of an impediment,” said Valerie Cross, analyst for PlayPennsylvania.com. “Operators have flocked to the state and produced millions in revenue. In that way, regulators achieved their goal of creating a reliable revenue producer for the state, and that could attract attention from other states as they work to set up legal sports betting.”
Retail sportsbooks, which reopened on January 4, bounced back somewhat from a rough December with a $35.4m handle. January’s handle was up from $13.4m in December, when casinos closed on December 12. Sportsbooks won $4m on January’s bets. The top retail sportsbook was Rovers-Philadelphia with $7m in bets.
“Casino closures have certainly spurred online casinos and online sportsbook betting, which will provide some long-term benefits for the industry,” Gouker said. “But for the state’s gaming industry to truly be healthy, it needs to see a full recovery with retail betting. If the pandemic continues to recede, that return to health could happen by the second half of 2021.”
Online casinos and poker rooms also continued their momentum with a record $80.4m in January revenue, solidifying and extending gains made in December, when online and casino poker revenue jumped to $71.6m and topped the previous record by nearly $12m.
Online casinos took in $2.6m per day over the month’s 31 days, up from $2.3m per day over the 31 days in December. That revenue generated $17.3m in state taxes and another $10.2m in local share assessments and county grants. Online table games and slots alone generated $77.7m in revenue on $3bn in bets, which was up from $2.9bn in bets in January.
“With retail casinos closed, December’s record could have been an outlier,” Cross said. “But January’s results prove that the gains made last month are more than resilient. Such a strong start to the year could mean a year with more than $800m in online casino revenue, which would be huge for the state.”