Pennsylvania Sports Betting Market Continues to Expand

Pennsylvania Sports Betting Market Continues to Expand

Wind Creek Casino in Bethlehem has announced plans to build a retail sportsbook after coughing up a $10 million licensing fee. It will become the 14th retail sports betting site in Pennsylvania, leaving Lady Luck in Nemacolin as the only casino without a sportsbook. The Pennsylvania Gaming Control Board approved Wind Creek’s sports betting operator license this week, and it plans to complete construction by November.

Wind Creek is Pennsylvania’s second-largest casino by revenue. Las Vegas Sands sold it to Wind Creek Hospitality – a subsidiary of Alabama’s Poarch Band of Creek Indians – for $1.3 billion last year. Its sportsbook will have 79 TV monitors and 13 self-service betting terminals, along with betting windows. “It’s something we all feel the property needed for some time, just to have an area where you can watch sports, and now we’ll have the betting on top of it,” said general manager Kathy McCracken.

It means that British bookmaker Betfred can expand into Pennsylvania’s lucrative online sports betting sector. The firm has set up a Las Vegas-based subsidiary called Betfred USA Sports, and it made its US debut when it launched a retail sportsbook at Iowa’s Grand Falls Casino in January. It then opened a retail and online sportsbook in Colorado through a partnership with Saratoga Black Hawk. It has a deal in place to launch an online sportsbook on Wind Creek Casino’s license, making Pennsylvania the third state in its expanding American empire.

Competition Heats Up in Pennsylvania

Betfred made a big splash in the US by sponsoring Tyson Fury’s rematch against Deontay Wilder earlier this year. Bryan Bennett, chief operating officer for the firm’s US operations, said it would be “very aggressive when it comes to attacking different states and attracting partnerships”. He added: “Fred always said when he came into the market, he wanted to be successful and, if he’s going to do it, he wanted to do it the right way. As we enter those open-mobile states, we’re going to be competitive and we’re going to be aggressive to attract customers.”

There are currently nine online sportsbooks in Pennsylvania, including FanDuel and DraftKings. It is the largest state by population to legalize sports wagering, and it has seven major sports franchises – four in Philadelphia and three in Pittsburgh – so it could become the market leader in the US. Some operators initially balked at the $10 million licensing fee and 36% revenue tax, which are extremely high compared to states like New Jersey and Nevada, but all the casinos have now taken the plunge apart from Lady Luck.

Betfred could become the 10th online sportsbook to launch in the state, but Penn National Gaming’s Hollywood Casino is also planning to unveil an online sportsbook this year. Competition is growing increasingly fierce in the state, which should ultimately be good news for sports bettors, as the rival books will have to compete to offer attractive odds and compelling bonuses.

Illinois Awards Seven Master Licenses

Illinois is another state that could rival Pennsylvania, New Jersey and Nevada for market leadership. It has a slightly smaller GDP than Pennsylvania, but a higher GDP, and it hosts four major sports teams. Retail sportsbooks opened in March 2020, just before the coronavirus lockdown, but they have not been able to gain any momentum due to the pandemic. This week, the Illinois Gaming Board approved master sports betting licenses for seven casinos, allowing them to open online sportsbooks at some point in future. That will be a crucial step, as online wagering accounts for the vast majority of the sports betting handle in states like New Jersey and Pennsylvania, and it is likely to become even more important during this new age of contagion.

Argosy Casino in Alton, Grand Victoria Casino in Elgin, Hollywood Casino in Aurora, Hollywood Casino in Joliet, Rivers Casino in Des Plaines, Casino Queen in St. Louis and Par-A-Dice Hotel Casino in East Preoria are the recipients of the seven master licenses. They will run for four years. However, Illinois has not yet specified when they will be permitted to launch online sportsbooks, as the gaming board will have to vet the applicants first.

It does get the ball rolling on an 18-month period in which leading operators DraftKings and FanDuel are prevented from applying for a master license. It is supposedly a punishment for them offering daily fantasy sports games in the state when it was technically illegal, but critics say it is simply a protectionist policy designed to give local operators a head start. DraftKings and FanDuel should now be able to apply for master licenses in December 2021.

Indiana Shows Signs of Recovery

Indiana sportsbooks increased their handle by 41.9% month-on-month in May. Handle plummeted to a record low of $23.6 million in April after the Covid-19 pandemic laid waste to the sporting calendar. It bounced back up to $37.3 million in May as a number of sporting events returned. There were several big UFC fight nights, NASCAR hosted a busy calendar of races and the Bundesliga in Germany sprung back to life.

The “other sports” category, therefore, accounted for $30.5 million in wagers during May. The rest went on futures wagers and obscure baseball and basketball games taking place around the world. At the start of the year, analysts estimated that Indiana would enjoy sports betting revenue of around $160 million in May, so the $37.3 million falls well short of those projections. However, operators will be pleased to see it moving in the right direction following the lockdown.

May’s sports wagers generated $3.2 million in revenue, up from $1.6 million in April, and yielded $302,097 in tax revenue for the state. DraftKings was the market leader, with a handle of $20.1 million and revenue of $1.8 million. FanDuel is the market leader in New Jersey, but it had to settle for second place in Indiana, with a sports betting handle of $12.3 million and revenue of $1.1 million. Caesars Sportsbook launched online in Indiana last month, so the competition is heating up there too.

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