Pennsylvania Joins the List of Record Breakers
Pennsylvania became the latest state to report a record-breaking handle when it revealed that sportsbooks took $462.8 million in wagers during September. It marked the first time the state’s handle has ever broken through the $400 million barrier and represented a 26.8% increase on the previous record, set in August. However, it was a pretty good month for bettors, as revenue was just $18.3 million.
That amounts to a 3.9% hold, which is below average for the US sports betting sector. Two-thirds of that revenue was eaten up by promotional credits, leaving just $6.3 million in taxable revenue for the state. Pennsylvania sportsbooks were fighting for market share at the start of the new NFL season, so they issued a number of free bet credits in order to stand out from the crowd.
Pennsylvania could not match the performance of neighboring New Jersey during a record-breaking month for the sports wagering industry. The Garden State set a new record for the country when its operators took a handle of $748.6 million in September. Pennsylvania’s market is not quite as mature, and it is subject to large revenue taxes, which have curtailed its initial momentum. New Jersey also benefits from New Yorkers crossing into the state to bet at its land-based sportsbooks, which helps explain why it is now the number one state in the US, despite having a smaller population than Pennsylvania.
Barstool Storms into Pennsylvania
Yet the Keystone State should benefit from increased competition in the months ahead. Penn National Gaming launched the Barstool sportsbook in Pennsylvania in mid-September, just in time for the second weekend of the NFL season. It had the fourth largest handle in Pennsylvania last month, despite only launching halfway through September. The brand took $32.3 million in sports bets, although it actually lost $2.4 million in revenue after issuing $2.2 million in promos.
The name of the game right now is to grow the overall pie, according to Penn National chief executive Jay Snowden. “We think we’re largely growing the market, which is very important, as opposed to just stealing share,” said Snowden, whose firm purchased a 36% stake in Barstool earlier this year. “That Barstool audience is very loyal. So we’ve been growing the market, from what we can see and what the data is telling us.”
FanDuel remained the clear market leader in Pennsylvania during September, according to the report from the Pennsylvania Gaming Control Board. It took $171.2 million, followed by DraftKings with $118.8 million, and then the two BetRivers books – one stemming from Philadelphia and the other from Pittsburgh – combined for $64 million to leave brand owner Rush Street Interactive in third place.
Market Share vs. Actual Revenue
Greenwood Gaming was a distant fifth in terms of handle. Its Kambi powered sportsbooks at Parx Casino and South Philadelphia took a handle of $32.7 million. However, it is interesting to note that they held revenue of almost $3 million. They issued just $320,000 in promotional credits, leading to taxable revenue of around $2.7 million. That was broadly in line with FanDuel’s $2.7 million taxable revenue, comfortably ahead of BetRivers’ revenue and well ahead of DraftKings and Barstool, which both reported a loss. It shows that in the early stages, operators can achieve commercial success by avoiding the fight for market share.
Parx Casino was the overall market leader for the Pennsylvania gaming sector during September, capping a strong month for the operator. It achieved revenue of $53.5 million across all gaming verticals, including its land-based casino, racetrack, online gaming site and sportsbook. Rivers Philadelphia, formerly known as SugarHouse, was back in second with $36.5 million, followed by Wind Creek Bethlehem on $32 million. Those figures show that casino gaming still dwarfs sports betting, but the sportsbooks are becoming an increasingly important source of revenue for some Pennsylvania operators.
Nevada is due to report its September handle and revenue figures in the next few days, and it will be interesting to see if it can knock Pennsylvania into third place. Indiana is currently in fourth, although it should soon be leapfrogged by Illinois. Colorado, Illinois, Michigan, Indiana, Iowa, Oregon and West Virginia all reported new record handles in September. The likes of Illinois, Colorado and Michigan are all new markets, and they should maintain an upward trajectory in October.
Bettor Lands Monster Parlay
Tennessee is poised to go live on November 1, with BetMGM, DraftKings and FanDuel the first in line to launch. That should help maintain the momentum the overall sports betting industry has built up in the US. The next step is for the sportsbooks to increase their revenue each month. Right now they continue to issue a large number of promo credits, and many results have also gone in favor of bettors. Favorites have performed well on the whole in the new NFL season, the Lakers won the NBA Finals and even parlays are hitting some books.
BetMGM reported that a bettor landed a seven-leg parlay this week.
Six of the seven selections were for games taking place in Copa Libertadores, the leading soccer competition in South America. The final leg was on the Dodgers to beat the Rays on the money line in Game 1 of the World Series. The bettor went six for six on soccer – including wins for Trujilanos at +475 and Delfin SC at +525 – and then cheered as Cody Belligner crushed a home run to hand the Dodgers a famous victory.
The parlay paid out $128,995 on a stake of $50. Parlays are normally a very profitable category for sportsbooks, as at least one leg generally seems to let bettors down, but one big win can put a serious dent in their monthly revenue figures. The win does not quite compare to the £585,000 ($766,000) that a British bettor won from a stake of £0.80 at odds of 683,738/1 in 2011, but it is one of the most impressive wins in the nascent American sports betting industry, and there should be many more to come in future.