Pennsylvania Make Concrete Start to 2020 by Seizing Record Handle
Pennsylvania sportsbooks made a strong start to 2020 by taking a record handle of $348.4 million in January. That represented a 1.7% increase on the previous month’s total of $342.6 million. Neighboring New Jersey saw its sports betting handle decrease by 3.2% month-on-month in January due to a lack of NFL and college football games, so Pennsylvania’s continued growth is impressive.
Football fans had 78 NFL games to bet on in December and the college season was still going strong. That dropped to just 10 NFL games in January – albeit playoff games – and a few college bowls, so Pennsylvania did well to increase its handle. Its strong performance can be attributed to the growth in online sports wagering, which passed the $300 million mark for the first time in January.
The figures from the Pennsylvania Gaming Control Board showed that online sports betting grew 3.8% compared to December, while retail betting dipped by almost 12% from $45.1 million in December to $39.7 million in January. It shows that Americans prefer betting from the comfort of their own homes to visiting a bricks and mortar sportsbook, which should ramp up the pressure on New York and Mississippi to permit online wagering alongside existing retail wagering. Two bills were actually filed in Mississippi this week in a bid to extend sports wagering to online books.
Pennsylvania Enjoys Healthy Revenue
Total revenue shot up to a record $31.6 million for Pennsylvania sportsbooks in January. That is almost double the revenue they enjoyed in December. It is tempered by $8.7 million that they gave away in promotional credits to drum up new business, leaving total taxable gross revenue of $22.8 million. Pennsylvania takes an extremely high 34% revenue tax, so it gained $7.8 million in January.
FanDuel is now well established as the market leader in Pennsylvania. It was responsible for $153 million of that $348.4 million handle, which is roughly 44%. DraftKings is now vying with Rush Street Gaming’s BetRivers operation for second place, with Parx a distant fourth.
Betfred Sponsors Fight of the Year
FanDuel Group is the US arm of London-listed Flutter Entertainment, formerly known as Paddy Power Betfair. It is now the dominant player in Pennsylvania and New Jersey, while it is making inroads in other states too. British bookmaker William Hill also holds a market-leading position in several states, including Nevada. Another British heavyweight, Betfred, is now keen to carve out a slice of the action.
It recently unveiled a sportsbook in Iowa, and it is poised to launch operations in Pennsylvania and Colorado imminently. It has now agreed become the headline sponsor the big heavyweight title fight taking place in Las Vegas on Saturday night, which should help boost its presence. Deontay Wilder puts his belt on the line in a rematch against Tyson Fury after their controversial draw in 2018.
Knockout specialist Wilder was initially the underdog, but he has surged ahead in the betting with many sportsbooks after proving a Bet Today USA popular pick. Betfred has -110 on both fighters, but some books have gone down to -130 for Wilder and pushed Fury out to +110. “I’m delighted to be a sponsor of the most anticipated fight of the year and if Wilder v Fury II is anything like the first fight we are in for a superb night,” said Betfred founder Fred Done.
Sports Betting Continues to Spread
Sports betting bills have now been launched in 21 states this year and 18 of them would legalize sportsbooks. If all of them were successful, 38 out of 50 US states would have legal sports betting, plus the District of Columbia and Puerto Rico. The latest additions to the list are Alaska and Wyoming. The Wyoming legislation would permit sportsbooks to commence operations in 2021. The Alaska bill is part of a wider proposed lottery scheme.
“In the face of low state revenues, my administration has been actively seeking new revenue sources to diversify our economy,” said Alaska Gov. Mike Dunleavy as he introduced a larger lottery bill. “Not only does this legislation have the potential of creating new business opportunities, the profits generated from lottery activities will be designated to K-12 education, domestic violence prevention programs, drug abuse prevention programs, foster care, and homelessness.”
Illinois Set for March Madness Launch
Illinois was the biggest state to legalize sports betting in 2019, and this week Gov. J.B. Pritzker said that the first sportsbooks would launch in time for March Madness. It is typically the most important month of the year for US books – last year Nevada set a new record with a handle of almost $600 million in March – so it is easy to see why they are keen to launch in time for the NCAA basketball extravaganza.
“The governor is pleased that Illinois sportsbooks will open for business by March Madness, generating revenue to rebuild universities, hospitals, and other facilities across the state,” said the governor’s spokesperson, Jordan Abudayyeh.
The state issued its first three licenses a few weeks ago, with Penn National Gaming, Eldorado Resorts, and Midwest Gaming and Entertainment the recipients. Sports betting will then be rolled out across the state, which could dent the performance of sportsbooks in neighboring Indiana, which has run free shuttle bus services to their properties from downtown Chicago.
Illinois is big enough to compete with Pennsylvania, New Jersey and Nevada to become the market leader in the US once its market matures. However, leading operators FanDuel and DraftKings will be banned for the first 18 months of trading as part of a so-called “bad actor” punishment. It relates to them offering DFS in the state when it was technically illegal, but they say it is simply a cynical mechanic designed to give local operators a head start.
Illinois will take a 25% revenue tax on sports betting, which is second only to Pennsylvania. Global Market Advisors, an analyst firm for the sector, estimates a sports wagering handle of $5.2 billion in Illinois by 2023, which should help the state plug its deficit.