Bettors wagered more than $5.5 billion on sports last fiscal year in Pennsylvania and as the busiest betting period kicks off this weekend, the Keystone State is on pace for an even larger handle.
Through December, the current fiscal year’s halfway point, more than $3.5 billion has already been wagered, according to the Pennsylvania Gaming Control Board (PGCB).
That pace projects another record year of revenue for license holders and tax revenue for state coffers.
“Companies are really aggressive to capture new patrons who may be interested in sports wagering. It’s very much in its infancy,” said Kevin Kile, Director of the Bureau of Sports Wagering Operations with the PGCB.
The state’s sports wagering industry marked its third year in November. Its growth is exponential.
The total annual handle, or total money wagered at licensed casinos and their online partners, grew 145% from the $2.2 billion wagered in fiscal 2019-20, according to year-end reports.
Revenue for license holders and resulting taxes paid to the state more than doubled year-over-year to $308 million and $111 million, respectively, those reports show.
There is a 34% tax on gross daily sports wagering revenue. The bulk of it goes to the state’s general fund. Doug Harbach, spokesman for PGCB said 2% is earmarked for a municipal grant program.
In-game betting and prop bets have helped swell interest in online wagering, Kile said.
The NFL’s conference championship games kick off this weekend. Winners move on to the Super Bowl on Feb. 13. No period on the sports calendar draws more action.
“It’s obviously the height of the industry with the NFL games taking place, followed by (NCAA basketball) March Madness,” Kile said.
Online betting drives the business. Of the $5.5 billion wagered last fiscal year, all but $455 million was placed over the internet. That’s nearly a 92% market share.
That online wagering dominates the sports-betting landscape should come as no surprise. Consumers can buy a car, a pizza and seemingly anything in between online.
Online wagers must be placed within Pennsylvania’s borders, and licensed operators must partner with brick-and-mortar facilities that don’t have their own sportsbook online.
There are 17 casinos or off-track-betting houses that take bets in-person. Of those, 14 have licensed online operations. PointsBet is the latest approved online operator. Its license was granted in December. The operator partners with Penn National Gaming’s Hollywood Casino in York, which opened in August. The online book is expected to go live in February.
FanDuel partners with Valley Forge Casino Resort in King of Prussia. About 36% of online bets are placed via FanDuel, the largest share in the state. Draft Kings and Hollywood at the Meadows in Washington, Pa., are in business together, making for the second-largest online book in Pennsylvania. Barstool works with Hollywood at Penn National Race Course in Grantville. The collective handled the third-most wagers last year.
The marketing behind these three books seems to have at the very least pushed them to the front of mind. Other well-known operators like Caesar’s haven’t fared as well, yet.
Pennsylvania won’t be the biggest state in online wagering, says Katie Kohler, managing editor of industry news site PlayPennsylvania.com. That designation will belong to New York, she said, where online sports betting began this month.
Kohler cites a Morgan Stanley report that said four sports betting apps handled a combined $603.1 million in bets in a nine-day period this month. Pennsylvania’s operators handled $750 million in all of December.
There are some common complaints about the state’s system, Kohler pointed out. Pennsylvania doesn’t allow performance-based wagering on individual athletes in college sports. There are fewer quirky prop bets around, for example, the Super Bowl such as the length of the performance of the national anthem. Betting on professional sports drafts isn’t permitted, either.
However, Kohler says Pennsylvania one day could reach $1 billion in the monthly handle. The industry is too new and is enduring uncertainty in the pandemic to predict what its high point might be in the coming years.
“I don’t know how big sports betting in Pennsylvania is going to get. To be honest, that’s what makes my job great. It’s exciting,” Kohler said.
