Online Casinos Have Pennsylvania On Pace For $1.3B For 2022

Online Casinos Have Pennsylvania On Pace For $1.3B For 2022

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Written by Ian

Published date · July 8, 2022 |
Last Updated · Dec. 14, 2022 | Read Time: 5 mins

Online Casinos Have Pennsylvania On Pace For $1.3B For 2022

The state of Pennsylvania currently has 18 online casinos in operation. For the month of May, they recorded $113.3 million in revenue. While not a record for the year, that would be in March when the online casinos combined for more than $5 million in revenue, it shows how stable this type of revenue now is for the online casino market and how crucial it is for Pennsylvania’s gambling success. May’s revenue had a slight increase compared to April’s $113.1 million in revenue and was not only the sixth straight month but also the seventh of the past eight months where online casino revenue was higher than $100 million for Pennsylvania operators. It also happens to be $12 million higher than the total revenue for May 2021 which was the first month since the online casino product launched in Pennsylvania in 2019 in which the $100 million revenue point was hit.

For the first five months of 2022, online casinos made a grand total of $55.2 million from players which equates to roughly $110 million monthly. The $110 million monthly average is just about $20 million more a month than the average monthly revenue from the same time period in 2021. This increase on a year-over-year basis has a large impact on the state as the online casino product shows major growth for Pennsylvania in the overall gaming industry. While the brick-and-mortar casinos are not hurting in terms of revenue, their year-over-year comparison is just about the same. While the sports betting product is the more popular of the two in terms of the general public’s attention, the online sports betting revenue is much less than the online casino games and does not have to compete with monthly and seasonal ebbs and flows as well as more skilled players at selecting winners of bets.    

On Pace For $5+ Billion

In all of 2021, the Pennsylvania brick and mortar and online gambling industry brought in a record of $4.73 billion in revenue. Out of that $4.73 billion, $1.11 billion was directly from online casinos. The $1.11 billion was less than half of the amount from the brick and mortar slots and was more than the total brick and mortar table games. Additionally, it was just a bit more than three times the revenue from sports betting. With the increase in revenue on the online gambling product end, the state of Pennsylvania is on pace to surpass $5 billion in revenue for 2022. This comes from players using their phones instead of making the drive to the casino to play their favorite slot, table games, or poker. If the current pacing stays the course, the online casino product will generate $1.3 billion in total revenue for operators in 2022.

US - On Pace For $5+ Billion

Pennsylvania Benefits

While the increased revenue is great for the online and brick-and-mortar casino operators, they’re not the only ones to benefit from the spike in revenue. The state of Pennsylvania and those who pay taxes in the state can also benefit from the bump in online casino revenue. In the state of Pennsylvania, there is a blended tax rate that equates to around 41% for the differing online operations. With this tax rate, the share of the revenue for Pennsylvania should go beyond $540 million for 2022. This is a large influx of money to go to the state which would have had to find another way to come up with almost $550 million if it wasn’t for the 2017 Pennsylvania legislation which made the state one of the first states to legalize online casino gaming.  With the sports betting operators in the state of Pennsylvania, it's easy to tell on a month-by-month basis which operators are ahead of the pack and which are falling behind. However, the Pennsylvania Gaming Control Board does not make its revenue public at the operator level for online casinos.

The several license holders in Pennsylvania have deals with multiple online casinos and sportsbook operators. Thus, all of that revenue is combined, for reporting, under the licensee’s name and not by the individual operator. The top licensees in the state are, on a constant basis, Rivers Casino Philadelphia, Hollywood Casino, and Valley Forge Casino Resort. They are the top in terms of generating online revenue in the state. However, the issue lies in the fact that each licensee has multiple online sites underneath them. Through these financial partnerships and dealings, the revenue among the sites is shared and thus there is no clear indication of top site performers. 

PA Revenue In May 2022

Just in May alone, the online sites under Penn National Gaming’s Hollywood Casino license made $45.5 million in revenue. Rush Street Gaming’s River Casino license made $26.9 in revenue. Boyd Gaming’s Valley Forge license generated $21.2 million. Where most online gambling sites see success is where they have a way to not only provide an online casino product but also an online sportsbook product. Operators like DraftKings, FanDuel, and MetMGM make their money from sports gamblers who can simply take their bankroll and play their favorite slot and table games simultaneously. Similar to the brick-and-mortar product, the majority of the revenue from the casinos comes from the slots. Out of the $113.3 million in revenue from the month of May, $78.2 million was from slots alone or about 69% of the total revenue. $32.3 million of revenue was generated from table games or 28.5%. Finally, poker accounted for $2.8 million in revenue. 

It is also important to note how much revenue was generated after removing the site and promotional credits from the equation. The state of Pennsylvania shares their public reporting to account for this in the board’s monthly figures which removes the sign-up bonuses and additional player incentives. For the month of May, the credits equated to roughly $23.5 million, meaning that the total gross revenue for the month of May was around $136.8 million. If you just look at the $136.8 million for the month of May, the monthly revenue would be larger than the $127.4 million in revenue made by online casino operators in Michigan as well as higher than the $136 million revenue for the state of New Jersey. Those two are the largest states in the country to operate legal online casinos.