Pennsylvania Stays In “Big 3” With Respectable February Haul

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The state of Pennsylvania has been able to maintain its status as one of the Heavyweights in the US sports betting industry and February numbers from the Pennsylvania Gaming Control Board (PGCB) further back up that fact. There are now three states that have surpassed $2 billion in handle since the Supreme Court's 2018 decision to overturn its blanket ban on legal sports betting - Nevada, New Jersey and now Pennsylvania.

Pennsylvania hit the $2.1 billion mark of bets taken in with its February haul. Not bad since legalized sports betting is just 13-months old. But as the whole world remains hostage by the coronavirus pandemic, the industry figures to take an immeasurable hit as long as sports are on hiatus.

“The next few months are impossible to predict until we get a better handle on how long the coronavirus will affect, not just sports and the gaming industry, but all of daily life,” said Dustin Gouker, lead analyst for PlayPennsylvania.com. “The immediate outlook of sportsbooks is secondary right now. But there is little doubt that the industry will be affected significantly, at least in the short-term.”

A deeper dive into the numbers

Pennsylvania failed to set a handle record in February but it did manage to surpass the $300 million mark for the fourth month in a row. Sportsbooks in the state took in $329.8 million in bets in February, down 5.3% from the record $348.4 million January handle. The end of the NFL season is a huge part of that overall dip.

The 10 land-based and seven online sportsbooks operating in the Keystone State reported $10.8 million in revenue in February but because of promotional credits, that number is somewhere closer to $4.7 million in gross profits which is a whole lot less than the record $31.6 million in profits Pennsylvania sportsbooks saw in January.

The unusually high tax rate of 36% in the state may not have been great for providers, but Pennsylvania state and local coffers were buoyed by $1.6 million in tax revenue in February.

Mobile Betting lead the way

Mobile betting has been the bread-and-butter of the most successful states in the US so far and Pennsylvania is no different. Of the $329.8 million taken in in February, a staggering 89.2%, or $294.1 million came via mobile apps – the third straight month that figure has topped $290 million.

Online betting provided the operators all of Pennsylvania’s revenues - $4.7 million and apps were responsible for every tax dollar the state collected from the legal sports betting industry. States with no or limited online wagering platform absolutely cannot ignore that fact.

The rough road ahead

Coronavirus has thrown a huge wrench into every aspect of life around the globe. The financial effect may not be known for some time. But next month’s sports betting numbers should give us a sense of exactly what kind of impact the total-sports shutdown has had on the economy and individual businesses along the way.

But analysts are trying to put a good spin on the whole thing. “Revenue from online casinos should help fill in the gaps, at least in part, while sportsbooks and land-based casinos feel the impact from COVID-19,” Dustin Gouker said. “In New Jersey, online casino revenue already tops $50m per month, and revenue could really leap forward in Pennsylvania, too. But it will be impossible to completely replace all the revenue lost from the sports world going dark.”

Growth has been the theme in the US legal sports betting industry since inception but the momentum is coming to a halt and for how long, nobody knows. It looks like the “Big 3” states in the US betting industry are set in stone, however. Nevada, New Jersey, and Pennsylvania should continue to lead the way once life gets back to normal.

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