The state announced its final tally for sports wagering in 2019 last week, and all signs point to a great 2020 ahead for the operators taking retail and online wagers.
When sports betting became legal across the U.S. in May 2018, states were ecstatic about the possibility of adding tax dollars from this already popular activity. However, the only official figures anyone could work from in creating projections came from Nevada. No one really knew how that would translate to a state that wasn’t as much of a tourist destination.
With the release of the 2019 year in review numbers from Pennsylvania last week, combined with the numbers from New Jersey over the last 18 months, it is safe to say that sports betting is here to stay! Here are some of the highlights from the report.
Pennsylvanians love to bet, even throughout the holiday season
Let’s start with the December 2019 betting figures for the state, which saw another month to month increase of 8% in handle, rising up to $342.6 Million. Another record month shows that as the market starts to mature, there will be new players entering the fray. Revenues from sports betting in December did take a bit of a tumble, however, dropping a couple million to 17.5 Million USD. This puts the hold percentage right around 5%, which has been the historical average in Nevada, so everything is right in line.
Mobile is the worst kept secret to success
Bear in mind that the numbers in Pennsylvania, especially the mobile numbers, are bound to grow leaps and bounds as some of the biggest players have only just entered the market. The most notable mover in December was, of course, Draft Kings, which saw their handle double to just shy of $36 Million. This is still a far cry from the market leader FanDuel, which accounted for $154.5 Million of bets in the month, over half the $297 Million taken in online bets.
Mobile betting being available is clearly the way that states can reap the most benefit from the new betting laws. New Jersey set the bar with their mobile numbers, but Pennsylvania is charging up towards them. This is why it is so frustrating to see states like New York on the fence about adding mobile at all in its state. If the point of legalizing sports betting is to generate much-needed tax revenues, then why limit the potential right out of the gate.
Annual figures are great, but dig a little deeper for the gold
For the year 2019, sportsbook operators took in 1.5 Billion USD in wagers. Of that, 1.1 Billion were placed online. Now, this sounds amazing to start with, but let’s look at these numbers in a little more detail. Yes, sports betting has been legal for the entire year, but not all the retail sportsbooks have opened their doors yet. A handful more are planned to launch in 2020, which will expand the competitive landscape. Even more amazing is that the online revenue was all generated from May 2019 onwards, and it was really more like the middle of June before things were off and running. With more mobile brand launched and even more to come in early 2020, those already fantastic number could be blown out of the water by the end of this year.
The future is bright, and that could be from glow of the slot machines
Lost in all this talk about sports betting is that online casinos and poker sites were also approved for launch back in 2017. It has been a much slower timeframe to see these sites open, but given the success of the games in neighboring New Jersey and the crossover impact that online sports betting had on the online casino revenues, we can see a very promising 2020 for online casino players and operators as well. This is especially true for the state, as the online casino tax rate of 54% for all online slots revenue should prove to be a cash cow by the end of the year.
Having all the products a site can offer launched will give players a more inclusive gambling experience, which tends to lead to longer sessions and, over time, more revenue for the operator. Look for many online casino and poker announcements to be made in 2020.
Overall, this report could not have been more promising both for the state of Pennsylvania and for those states that are around to launch their own sports betting industries or for those still on the fence about legislation. The popularity of sports betting continues to grow, and the quality of the product being received by gamblers in states like Pennsylvania is going to go a long way to beating back the offshore sites that continue to linger in the market.