HARRISBURG — Bettors wagered $1.1 billion at the state’s casinos and online in first year of legalized sports gambling in Pennsylvania, generating more than $25 million in state tax revenue over that period, state gaming statistics show.
Pennsylvania is now the third-largest market for sports betting in the country, behind only Nevada and New Jersey, said Dustin Gouker, an analyst for PlayPennsylvania.com, a website tracking the gambling industry in the state.
Based on population alone, it’s likely Pennsylvania’s sports betting market could pass both those states, he said. Pennsylvania legalized sports betting as part of a 2017 gambling expansion that included a provision saying that if the federal ban on sports betting was lifted, Pennsylvania could begin offering sports wagering. The federal ban was ended by a May 2018 Supreme Court decision.
Pennsylvania is now one of 13 states that allow sports betting. In addition to New Jersey and Nevada, the others are Delaware, New York, West Virginia, Arkansas, Indiana, Iowa, Mississippi, New Mexico, Oregon and Rhode Island, according to Legal Sports Report, which is tracking sports betting legislation across the country.
Almost half the wagers placed in Pennsylvania were made in just the last two months — $316 million in November and $241 million in October, he said. Sports betting in Pennsylvania has accelerated as more casinos offer it, and more online wagering is available, he said.
Pennsylvania launched sports betting in November 2018 when Penn National near Hershey began taking sports wagers. Since then, sports wagering has added at 11 other casinos and betting parlors, including seven that take sports wagers online.
A 13th sports wagering site was approved by the Gaming Control Board earlier this week. Mohegan Sun plans to take sports wagers at an off-track betting parlor in Allentown
Online sportsbooks generated 84 percent of the state’s November handle.
“Online sports betting has unquestionably been the key driver of the state’s growth,” Gouker said. “Not only has online betting grown to account for an overwhelming majority of the state’s handle, but it has also helped spur growth among retail sportsbooks. That is a pattern that we saw in New Jersey, too.”
Gouker said he doesn’t think it would be stretch to imagine that sports bettors placing $10 billion in wagers a year in Pennsylvania.
There were $562 million in wagers placed in New Jersey in November, and at that pace the state’s sports betting market will exceed $5 billion next year, with room to grow, Gouker said.
The state collects 34 percent tax on the revenue left to the casinos after they’ve paid out winnings, so when gamblers win more, there's less revenue left over for the state to tax, Harbach said.
As a result, the state’s tax haul from sports betting has remained steady at $5 million a month for each of the last three months — September, October and November — even as the amount wagered has increased dramatically. In September, there were $194.5 million placed in sports bets in Pennsylvania, $46.7 million less than the amount wagered in October and $122 million less than the amount wagered in November, according to gaming control board data.
In all three months, once winnings were deducted, the revenue of the sports book operators was about $15 million.
“Sports wagering revenue will be less predictable than, for example, slot machine revenue, since there is not the distinct randomness of slots wagering,” Harbach said. “We have seen this, too, in table games, where wagers can be steady, but revenue can fluctuate up or down much more.”
John Finnerty reports from the Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by CNHI. Email him at email@example.com and follow him on Twitter @cnhipa.