Sports Betting in Pennsylvania Remains Strong

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Noah Togiai #83 and Christian Elliss #53 of the Philadelphia Eagles celebrate against the Dallas Cowboys. Tim Nwachukwu/Getty Images/AFP

Although there are an increasing number of states climbing aboard the sports betting gravy train, Pennsylvania’s gaming industry appears more robust than ever, citing a 27% jump in August over the previous month.

More good news is expected as the NFL and college football seasons are underway.  

Prosperous August Looms Large  

Football is far and away the biggest betting sport in the United States but it doesn’t begin in earnest until September. And that’s why Pennsylvania’s sports betting numbers in August were so encouraging.  

According to the most recent reports, sports betting revenues in August soared 27% over July, with the overall handle up from $337 million to $363 million in just one month and revenues rising $9 million from $33.2 million to $42.2 million. These are precisely the economic indicators the sportsbooks and Keystone State legislators were hoping for as the undisputed king of North American sports, the NFL, ramps up for its September debut.  

PlayPennsylvania Managing Editor Katie Kohler said in a statement, “All signs are pointing to September being a huge month for sports betting in Pennsylvania. Pennsylvania online casinos are also back to top form after a typical summer dip. Outside of the stretch from March to May, August was the fourth-biggest month for Pennsylvania online gambling, showing that we still have yet to see the ceiling for this important moneymaker for the state.” 

It will be interesting to see how September of 2022 compares to last September, when the total betting handle in Pennsylvania was $578,760,746 with operators generating revenues of $48,113,670, and the state taking their cut of the pie that equaled over $10.1 million.  

Online Revenues Dwarf Retail 

The metrics reveal online sports betting revenues tower over retail locations, and Pennsylvania is no different. Almost 92% of the sports betting revenue is generated online, which is consistent with the rest of the nation.

Unlike some legislators who insisted that only retail betting should be allowed, the data clearly shows that this modern-day gold rush is mined digitally and not from in-person betting. It’s not all that surprising considering the majority of Americans are tethered to their phones, which means making a quick bet from the comfort of their living rooms drastically outweighs the inconvenience of traveling to the nearest sportsbook or betting kiosk.

Pennsylvania also has a rather steep tax rate for online operators at 36% which is identical to what the retail providers also pay. In many states, retail operators pay a much less onerous tax rate because of their much smaller betting handle compared to online platforms.

When online sports betting was launched in the Keystone State, there was a bit of trepidation with the exorbitant licensing fees of $10 million, along with a tax rate of 36% that is only eclipsed by a few states, namely New Hampshire, New York, Rhode Island, and Delaware

The Race Is On

However, gaining a foothold in new markets has been a consistent strategy by the big players, like FanDuel and DraftKings, that spend lavishly on advertising and promotional bonuses to acquire early adopters. Studies have shown most online sports bettors will only sign up with one sportsbook which is why the relentless marketing blitzes are so common in untapped markets.

In February of 2020, when Pennsylvania had yet to establish itself as a vibrant market, 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.”

And so far, so good, the future of sports betting looks bright in Pennsylvania as we are expected to see bigger numbers than ever as the NFL and college football make their annual appearance as the sport of choice for gamblers far and wide.