Pa.’s Online Sports Betting Market Could Become Nation’s Most Lucrative
Pennsylvania’s online sports books will open soon, bringing with them a projected betting surge that could make the commonwealth the nation’s most lucrative digital market, analysts predict.
Online sports betting will be available in Pennsylvania “imminently,” according to the Pennsylvania Gaming Control Board, with casino testing scheduled to begin in the next few weeks. As more casinos enter the marketplace, Pennsylvania soon could rival New Jersey’s online sports betting business, which handled nearly $300 million in wagers in March alone.
“It certainly could be bigger than Nevada or New Jersey is right now,” said Dustin Gouker, analyst at Play Pennsylvania, a website that covers gaming news. “If everything goes right, and everybody puts out a good app, they’re going to see billions of dollars wagered annually and revenue in the hundreds of millions. It’s going to be robust.”
Tuesday marked the anniversary of the U.S. Supreme Court’s 2018 decision to overturn a federal ban on sports betting outside Nevada, opening a new world of legal wagering. Since the decision, eight states have made legal sports betting available, and bettors have wagered nearly $8 billion, according to the American Gaming Association.
Sports betting went live in Pennsylvania in November, with six casinos now operating eight sites. Pennsylvania casinos accepted $44.5 million in wagers in March, according to Gaming Control Board figures, and $125.6 million in their first five months. Sports betting has generated $12.6 million in gross casino revenue, the amount wagered minus the winnings returned to players, and nearly
$4.3 million in state taxes, according to Gaming Control Board data.
More physical locations are to come. Mohegan Sun Pocono and Mount Airy Casino Resort have applied for sports betting licenses.
Mohegan Sun is scheduled to make a presentation today to the Gaming Control Board in Harrisburg.
Sands Bethlehem Casino Resort obtained an online gambling certificate for PCI (Poarch Creek Indians) Gaming Authority, which purchased the Sands in March 2018. The Sands has no intention of using the certificate while still controlled by Sands Chairman and CEO Sheldon Adelson, a firm opponent of online gambling.
PCI, which operates under the Wind Creek Hospitality brand, has not publicly announced its plans for sports betting in Pennsylvania. Wind Creek’s home state of Alabama hasn’t legalized sports betting, but it is available at some of the company’s locations outside the state, including at the Wa She Shu Casino in Gardnerville, Nev., that it manages.
But online sports betting, teased in Pennsylvania for several months, is the major player arriving. Doug Harbach, director of communications for the Gaming Control Board, said casinos should begin testing their online and mobile betting apps within weeks.
When online betting becomes available in Pennsylvania, analysts predict the market could be as fertile as New Jersey’s. In March, according to its Division of Gaming Enforcement, New Jersey’s handle significantly surpassed Pennsylvania’s: $372.4 million in sports bets were accepted, 80 percent of which ($298.3 million) were placed online.
Pennsylvania will be the fourth state with online sports betting, and the largest in population, after Nevada, West Virginia and New Jersey. Online betting in West Virginia has been down since March and is now subject to a lawsuit.
“When you look at casino gaming overall, Pennsylvania is one of the largest states,” said David Forman, senior director of research for the American Gaming Association, a trade group that represents the U.S. casino industry. “In terms of gaming, Pennsylvania collects more tax revenue than any other state. The appetite for a legal sports betting market there is huge.”
Harbach said Pennsylvania’s online betting market initially will be open for limited hours during the testing period. After that, sites will be available around the clock, Harbach said.
Online bettors don’t have to be residents of Pennsylvania but must make bets within the commonwealth. Casino apps use “geofencing” to determine a bettor’s location. Forman said that the technology is accurate enough to deny bets on bridges between Pennsylvania and New Jersey.
“Regulators are rightly focused on the integrity of the bets and making sure operators have reliable platforms to use,” Forman said. “All markets, with maybe the exception of New Jersey, have shown a learning curve. As other states learn and roll this our more broadly, we’ll see an impressive uptick in the amount bets and revenue raised.”
The American Gaming Association in 2018 said that Americans illegally bet more than $150 billion annually on sports. The online market likely will affect that.
“All anybody knows from their best guesses has been that there are billions of dollars of illegal sports wagering going on underground,” Harbach said. “The idea is to pull some of that above ground into a regulated environment. Certainly if some of that is then regulated and taxed, it can be a significant amount. Nobody knows what that amount is going to be yet.”