The latest sports betting and online gambling revenue report for Pennsylvania is a chance not only to revisit the past month of activity in the Keystone State but to also reflect back on how the industry has grown since launching in 2019. The Pennsylvania Gaming Control Board (PGCB) released its fiscal year report for 2021-22 in addition to the PGCB report recapping June activity. While the monthly numbers were a little lackluster, the annual report reflected a massive year of growth.
iGaming revenue for June hit nine figures
A trend across both the annual and the monthly PGCB reports is the continued growth of the online casino industry. The collective state online casinos generated $102.9 million in revenue in June with Barstool Casino leading the way with $42 million. Second was PlaySugarHouse with $25.5 million, while FanDuel rounded out the top three with $18.4 million. Past that, no single operator generated more than $4.2 million.
What could benefit FanDuel in the coming months is the launch of a live dealer product in the state. Year-over-year growth for online casino was 15.76%, but some operators experienced substantial year on year dips. Presque Isle Downs was down over 42%, while Mount Airy, which operates the Fox Bet Casino brand was down 28.5%. For the latter, given that Fox Bet and FanDuel are both owned by Flutter, this could be more an indication of prioritizing within the company as opposed to a lack of performance.
Looking at FY over FY growth, igaming continues to expand at a steady pace. For FY 20-21 the industry generated $897 million in revenue. The industry is now well over a billion dollars annually with $1.23 billion in revenue the past fiscal year. It also coincides with major FY-over-FY growth for land-based gaming. Both industries experienced similar annual growth, but recall the retail properties were bouncing back to pre-COVID numbers in terms of slots while igaming experienced continuous growth.
It is good news for live table games as well, which exceeded $1 billion in revenue for a state record since table games became available in FY 10-11.
On the tax front, online casinos continue to do big business both for operators and the state. Slot activity produced $288 miilion in tax revenue and table games added an additional $45 million.
PA sports betting generated $7B in handle during FY
Like every state sports betting revenue report, the PGCB report for June sports betting revenue reflected a seasonal dip in betting interest with $315.7 million in handle compared to $493.4 million in May. That action generated $12.8 million in revenue for a hold of 4%.
The unusually low hold is not unique to Pennsylvania. Last month, New Jersey and Michigan experienced similar revenue dips. It is unclear what is causing the phenomenon, but there could have been a preponderance of futures bets across markets and operators related to the NBA or NHL playoffs which cashed in.
Like May, the top three operators in terms of handle were FanDuel ($158 million), DraftKings ($88.6 million), and BetMGM ($44.9 million).
Year-over-year, state sportsbooks dropped by 6.3% from $420 million in bets in June 2021.
Comparing fiscal years for sports betting, there is growth, but it is clearly flattening off compared to online casinos. It is also important to note PGCB promoted FY growth using the metric of revenue instead of handle, which makes for much more volatile numbers for reasons like the one discussed above. When looking purely at handle, which is a good measure of general interest, handle was up to roughly $7 billion in FY 21-22 compared to $5.6 billion in FY 20-21.
Revenue, on the other hand, was essentially flat. FY 20-21 produced $308.8 million in revenue compared to $315.7 million in revenue this past fiscal year. Another problem with relying on these numbers is that they do not reflect the promotional spend deductions allowed in Pennsylvania. Operators deducted more than $194 million in free play and promo spend, so gross gaming revenue was actually more like $510 million.
Tax payments, which are based on the adjusted revenue number, yielded over $107 million for the state.