Hollywood Casino at Penn National Race Course took the first legal sport bet in Pennsylvania in mid Oct. 2018. It wasn’t until late May 2019 that the first online sportsbook arrived.
Bryan Adams glorified the “Summer of ’69” but for sports bettors in Pennsylvania, the summer of 2019 was when things really started to rock and roll. From June to September, five sports betting apps launched.
Two years later, there are thirteen online sportsbooks and mobile sports betting is the overwhelming preference with about 90% of wagers placed online.
And now the times are changin’
Look at everything that’s come and gone
The industry is still very much in its early stages and operators continue to enter Pennsylvania. So, we’ll take a cue from the Canadian rocker and look back on the past two years and get some thoughts about the future of sports betting in Pennsylvania.
Pennsylvania sports betting in 2019/2020
Handle hit a then-record $348.4 million in Jan. 2020 due to NFL and college football action. It showed the huge popularity of online sports betting since in Jan. 2019, handle was only $32 million.
PA sportsbooks were poised for the first March Madness with mobile wagering but the coronavirus pandemic canceled the NCAA tournament and depleted the sports calendar during the spring.
PA sports betting totals for FY 2019/2020
Online handle: $2 billion
Total handle: $2.5 billion
Revenue: $163.3 million
Taxable revenue: $135.5 million
State tax: $38.6 million
Local share: $2.3 million
PA sports betting handle, revenue, market share and hold % FY 2019/20
Sportsbook HandleMarket share %Revenue (GGR) Hold %Promos
FanDuel (Valley Forge)$993.74 million43.5%$61.3 million6.2%$20.4 million
SugarHouse (Rivers Philadelphia)$317.2 million13.9 %$23.4 million7.4%$5.6 million
DraftKings (The Meadows) $279.1 million12.2%$19.6 million7%$8.7 million
BetRivers (Rivers Pittsburgh) $257.4 million11.3%$18.7 million7.3%$5.9 million
Parx $203.5 million8.9%$18.2 million9%$2.5 million
Fox Bet (Mount Airy)$104.7 million4.6%$7.1 million8.6%$1.5 million
Unibet (Mohegan Sun Pocono) $31.4 million1.4%$2.7 million8.6%$1.5 million
South Philly Race & Sportsbook (retail only)$22.7 million1.0%$2.8 million12.4%n/a
Hollywood Casino at Penn National (retail only)$22.4 million1%$1.6 million7.5%n/a
TwinSpires (Presque Isle)$22.3 million1%$2 million9%$35,844
Caesars (Harrah’s Casino Philadelphia$21.6 million.9%$1.7 million7.7%$18,416
Oaks Race & Sportsbook (retail only)$8.7 million.4%$788,6729.1%n/a
The Downs at Lehigh Valley (retail only)$176,4940$44,07825%n/a
What they said about PA sports betting during its first year
Oct. 2019
Former New Jersey Gov. Chris Christie during the 2019 Global Gaming Expo:
“Let’s take a state that has really screwed [sports betting] up. Pennsylvania. I mean, a rolling dumpster fire.”
February 2020
Chris Krafcik, Managing Director of Sports & Emerging Verticals at Eilers and Krejcik, on the future of handle and revenue in 2020 and beyond:
“We expect the Pennsylvania sports betting market to generate total revenue of between $600m and $700m once mature, with the bulk of that total—or 85%+—coming from the online channel.”
American Gaming Association SVP of Government Relations Chris Cylke said:
“Marketplaces like Pennsylvania where you have a big state and an established gaming industry, operators largely held their nose and paid the fee, notwithstanding the tax policy in place hoping to work on that at a later date because it’s important to get a foothold into a market like PA.”
Pennsylvania sports betting in 2020/2021
At the start of July 2020, the NBA and NHL had yet to resume their seasons. Major League Baseball wouldn’t start their abbreviated season until the end of the month. Sportsbook operators were holding their breath that the NFL and college football’s Power Five conferences could pull off a complete schedule.
Coronavirus did not scrap the NFL season and there was plenty of college action which gave PA sportsbooks their strongest streak. From Sept. 2020 to Jan. 2021, handle and revenue increased each month. Handle hit a record $615.3 million in January and revenue reached a record $49.3 million.
Albeit a year late, the first NCAA tournament with online betting produced $560 million in handle and $41 million in revenue.
Pennsylvania sports betting totals for FY 2020/2021
Online handle: $5.1 billion
Total handle: $5.6 billion
Revenue: $440.6 million
Taxable Revenue: $308.8 million
State tax: $105 million
Local share: $6.2 million
PA online sports betting handle, revenue, market share and hold % FY 2020/21
SportsbookHandleMarket share %Revenue (GGR) Hold %Promos
FanDuel (Valley Forge)$2 billion37%$175.2 million8.5%$48.8 million
DraftKings (The Meadows) $1.3 billion23 %$75.8 million5.9%$21.4 million
Barstool (Hollywood Casino)$565.6 million10.1%$48.4 million8.6%$20.8 million
BetRivers (Rivers Pittsburgh) $328.5 million5.9%$27.1 million8.3%$6.9 million
BetRivers (Rivers Casino Philadelphia) $293.3 million5.2%$23.2 million7.9%$2.2 million
Parx$287.4 million5.1%$27.7 million9.7%$2 million
Fox Bet (Mount Airy)$254.7 million4.6%$19.9 million7.8%$6.7 million
BetMGM (Hollywood Casino Morgantown)$225.4 million4%$16.5 million7.3%$11.5 million
Unibet (Mohegan Sun Pocono) $106.2 million1.9%$11.4 million10.7%$7.9 million
TwinSpires (Presque Isle)$48.6 million.9%$4.7 million9.8%$1.2 million
Caesars (Harrah’s Casino Philadelphia$45.9 million.8%$2.8 million6.2%$68,684
South Philly Race & Sportsbook (retail only)$22.2 million.4%$2.9 million13%n/a
Betway (Live! Casino Philadelphia)$21.9 million.4%$2.4 million11.1%
Betfred (Wind Creek)$16 million.3%$891,3185.6%$2 million
The Downs at Lehigh Valley (retail only$13.2 million.2%$825,3296.3%n/a
Live! Casino Pittsburgh (retail only)$4.4 million.1%$618,92013.9%n/a
Insights about PA sports gambling in 2020/2021
Ezra Kucharz, DraftKings’ chief business officer, on the sportsbook getting exclusive naming rights to the field club at Lincoln Financial Field:
“Philadelphia is home to some of the most passionate football fans, and we could not be more excited to join forces with the Eagles. Be it fans at home, on the DraftKings mobile app or inside Lincoln Financial Field, we look forward to introducing Eagles fans and DraftKings customers alike to an all-encompassing DraftKings experience.”
Paul Martino, Doylestown, PA-based founder of Bullpen Capital, on plans to open Bankroll in Philadelphia, which is being billed as “the sports betting parlor of the future.”
“Now the fun is going to show up. We are now going into the next wave of innovation, where it’s not just going to be casinos opening their sportsbooks. It’s going to be an integrated entertainment experience. I’m optimistic our timing might be right.”
Dave Portnoy in an email announcing Barstool sportsbook’s launch in PA:
“Our Barstool Sportsbook is officially live in Pennsylvania. Now I know what you’re thinking. Why do I care? I don’t live in Pennsylvania. Well this is just step 1 of our world domination plan. We plan to quickly launch in every state where sports gambling is legal. Just like how we’ve built this company brick by brick we will launch state by state and give each state the attention it deserves. Obviously my haters of which there are many are hoping we fail. Well I have an undying faith in the loyalty of our fans that make me believe we will do what we always do and that’s shut up the critics and astound Wall Street with our performance.”
Top sportsbook operators in Pennsylvania
Since Aug, 2019, FanDuel online sportsbook has had the highest handle each month. Even as more sports betting operators entered the Commonwealth, FanDuel continued to take about 40% of all bets placed online.
DraftKings has held a firm grip on the No. 2 spot.
The much-anticipated Barstool sportsbook arrived in Sept. 2020. It reached a high for handle ($71.8 million) and revenue (14.7 million) in Dec. 2020. Handle reached a low in June 2021 ($31.8 million) and revenue sunk to $3.2 million.
BetMGM PA sportsbook arrived in December 2020 and eventually ousted Barstool from the No. 3 spot in Pennsylvania for handle.
Damon Singer, an analyst at Eilers & Krejcik Gaming commented to PlayPennsylvania:
“It’s worth mentioning that the FanDuel and DraftKings’ combined online share has declined a bit since the new operators – most prominently Barstool and BetMGM – have entered the PA market. In calendar year 2020, DraftKings and FanDuel combined for close to 70% of the state’s online handle vs. 2021 where they’re trending in the low 60s.
Still, they’ve resisted that erosion pretty well. As new brands have launched, the most notable instances of such erosion can be seen at the Rivers brands and Parx.”
Singer noted that COVID restrictions (PA casinos were closed a quarter of the year in 2020) might have contributed to the declining market share of Rivers and Parx since they could no longer leverage their land-based brand awareness.
Did fantasy help FanDuel and DraftKings gain a foothold?
In Oct. 2017, the PA House legalized daily fantasy sports. DraftKings and FanDuel still remain the top two operators for DFS revenue in PA.
“The advance marketing advantage for DraftKings and FanDuel through DFS in many states, including Pennsylvania, has surely played a part in their success in those states,” commented Singer. “It’s a significant head start for them getting to develop a player database prior to the launch of sports betting.”
Singer compared PA to Iowa where DFS and online sports betting launched around the same time. FanDuel and DraftKings don’t control nearly the same share of the Iowa market.
Sports wagering just getting started
What’s next?
As more states legalize sports betting, how will the product improve and who will emerge winners in the long-term?
The future of sports betting is being shaped in Pennsylvania at SeventySix Capital. The Conshohocken-based sports tech venture capital fund focuses their investments on sports tech, sports betting and esports. In May, VSIN, a SeventySix Capital portfolio company, was acquired by DraftKings. Another portfolio company, Vigtory, was acquired by Fubo in March 2021.
Wayne Kimmel, managing partner at SeventySix Capital, offered his thoughts on FanDuel’s early lead and chunk of market share:
“It’s a big deal so far. With some of the new players coming in like Fubo, it will be interesting to see how that plays out. There are also some very large players and everyone is getting their feet set. I would be surprised if this lead they (FanDuel) have is as big as it is next year.”
Kimmel believes there are many people who don’t know you can legally bet on sports in Pennsylvania.
“You can make the argument we haven’t even got to the starting line. We are just scratching the surface and we are still really early.”
The future of sports betting
Kimmel and his team at SeventySix Capital are obsessed with the “next next thing in sports” and right now, that’s sports betting.
“To hear NFL Commissioner Roger Goodell talk about how the future of the NFL is all about sports betting is unbelievable after all the years of them being against it and now leaning into it.
“The new types of innovations and technologies, whether that is augmented reality, new apps or ways to bet and watch, and personalizing the viewing experience…it all plays into sports betting and fan engagement. How can people get closer and more interested in their team?”
On the future of sports betting in Pennsylvania, Kimmel added:
“The only thing that’s left that is appointment viewing is sports and that bodes very well for sports betting. When you are watching the game and have money on the line, your attention is focused on the next play and the result of the game. We haven’t come close to where we are going to be at for live betting. It’s just getting going. The numbers aren’t what they are in Europe.
“It’s exciting where we are today. It’s amazing how fast it’s grown in Pennsylvania, but at the same time, there is so much more growth. The entrepreneurs and the innovators are still just trying to build what’s next. We want to talk to them and invest to help them build what this industry will look like in the future. It’s not going to look like it is right now. The apps we have and the way we bet on sports will be different. I guarantee that. How it’s going to be different…it’s going to be up to the entrepreneurs. It’s going to be better and a lot more fun.”
Timeline of online sportsbook launches in PA
Online sportsbook Date of Launch
Sugarhouse (Rivers Philadelphia)June 2019
ParxJune 2019
BetRivers (Rivers Casino Pittsburgh)June 2019
FanDuel (Valley Forge Casino)July 2019
Fox Bet (Mount Airy)Sept. 2019
Unibet (Mohegan Sun Pocono)Nov. 2019
DraftKings (The Meadows)Nov. 2019
BetAmerica (Presque Isle Downs) Dec. 2019
Caesars (Harrahs Casino Philadelphia) March 2020
Barstool (Hollywood Casino) Sept. 2020
Betfred (Wind Creek) Dec. 2020
BetMGM (Hollywood Casino Morgantown)Dec. 2020
Betway (Live! Casino Philadelphia) June 2021
Lead photo BetRivers Sportsbook at Rivers Casino Pittsburgh c/o DMAC Architecture.
