Thanks To All The Newly Legalized Forms, 2019 Was A Record Year For PA Gaming

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Slots revenue is the bread and butter of the casino business, and it actually declined in Pennsylvania last year, which is not new. That happened four times before in the 14 years since casinos opened, and slots play in the state has been more or less stagnant for nearly a decade.

What was new in 2019 was all kinds of other legalized gambling that combined with traditional casino games to post record commercial gaming revenue of $3.41 billion in the state last year. That was an increase of $146.1 mm, or 4.5%, over 2018.

Table games set record, even if slots didn’t

The calendar year’s new high in gambling was spelled out by the Pennsylvania Gaming Control Board in a financial summary Thursday.

Despite the stalled interest in slots, the 12 casinos earned a record amount from table games — more than $900 mm. Many of them also made healthy revenue from sports wagering for the first time and a few did so from online casino games.

Additionally, the operators of daily fantasy sports sites increased revenue sharply over 2018 and truck stop video lottery terminals came into use at 20 locations.

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Put it all together, and Pennsylvania’s still-growing gambling industry presented “a good picture for the last year,” Executive Director Kevin O’Toole summarized at Wednesday’s monthly meeting.

The state’s wide-ranging growth of gambling activity has been spurred by politicians’ eyeing its tax revenue and licensing fees, which help the state fill budget holes without requiring legislators and the governor to defend general tax increases.

Pennsylvania has higher taxes than most other states on all forms of commercial gaming, and together those levies netted $1.42 billion for the state and local governments last year, $35.4 mm more than in 2018.

The numbers behind each form of gaming

Here’s each gaming category’s level of revenue last year and change from 2018 (with parentheses showing the taxes generated in 2019):

  • Slots: $2.36 billion, -0.29% ($1.22 billion in taxes)
  • Table games: $903.6 mm, +2.82% ($145.3 mm)
  • Sports wagering: $84.1 mm, after a late-2018 start resulted in $2.5 mm ($30.3 mm)
  • Interactive casino games, or iGaming: $33.6 mm in their first year ($13.3 mm)
  • Fantasy sports contests: $25.9 mm, +69% ($3.9 mm)
  • Truck stop VGTs: $2.3 mm in their first year ($1.2 mm)

Valley Forge had the biggest year-over-year jump

As is the case every year, individual casinos had varying levels of success.

Valley Forge Casino Resort, which benefited from changes that included an alliance with FanDuel as the state’s most popular online sports betting site, saw revenue climb 28% in 2019.

Rivers Casino Philadelphia was the only other casino with double-digit growth, 11.9%, bolstered by both an online casino and sports betting.

Close behind were two more of the state’s largest casinos, Rivers Casino Pittsburgh (9.3%), which offers sports betting but not casino games online, and Parx (6.1%), which has an online site for both sports and casino play.

Three casinos experienced an overall decline in revenue: The Meadows (-3.6%), Harrah’s Philadelphia (-3.3%), and Mohegan Sun Pocono (-2.6%).

Each casino’s slots, table games numbers

Ranked in order of their total volume, here’s the rundown on each casino’s slots and table games revenue in 2019 and the change in each from 2018:

  • Parx: slots $421.9 mm (+2.5%); table games $192.1 mm (+0.4%)
  • Wind Creek Bethlehem: slots $284.9 mm (-4.7%); tables $237.2 mm (+6.9%)
  • Rivers Pittsburgh: slots $297.7 mm (+5.8%); tables $82 mm (+7.9%)
  • Rivers Philadelphia: slots $180.5 mm (-0.2%); tables $131.5 mm (+8.0%)
  • Harrah’s: slots $191.4 mm (-4.3%); tables $59.2 mm (-4%)
  • Hollywood Casino: slots $203.1 mm (-1.6%); tables $37.2 mm (+2.9%)
  • The Meadows: slots $199.9 mm (-5.3%); tables $35.7 mm (-0.2%)
  • Mohegan Sun Pocono: slots $193.4 mm (-2.5%); tables $33.5 mm (-6.3%)
  • Mount Airy Casino Resort: slots $144.1 mm (-1.4%); tables $38.1 mm (-9.2%)
  • Valley Forge: slots $102.7 mm (+12.4%); tables $38.6 mm (+1%)
  • Presque Isle Downs: slots $114.2 mm (-1.1%); tables $15.1 mm (+5.3%)
  • Lady Luck Casino Nemacolin: slots $29.5 mm (+4.3%); tables $3.5 mm (-14.2%)

Sports betting could more than double in 2020

The eight online/mobile sports betting sites in the state and retail sportsbooks operated by 10 casinos combined for $84.1 mm in revenue. That was what they retained from losses by players betting a total of $1.49 billion on every conceivable type of sport and wager.

As the sports betting industry is still growing in Pennsylvania, with many online operators starting in the second half of the year and three more competitors likely in 2020, analysts have projected that sports betting revenue will be more than twice as high this year.

Because in most cases the online sites got a much later start than the retail sportsbooks, last year’s overall balance of online vs. retail sports wagering does not reflect recent reality, in which more than 80% of betting activity is online/mobile.

The online sites combined for 51.1% of sports betting revenue last year, led by far by the FanDuel site affiliated with Valley Forge. It claimed $22.2 mm in revenue.

The most retail revenue through bettors walking up to windows and kiosks came at Parx, with $9 mm, followed closely by Rivers Pittsburgh ($8.3 mm) and Rivers Philadelphia ($7.8 mm).

Online casino games just getting started

Five casinos in the last half of 2019 began providing iGaming in which patrons may use their computers or smartphones to play slots, table games, and in one case, poker. Several more such sites are expected in 2020.

Of $33.6 mm in revenue derived from players’ losses, $20.9 mm was from slots, $8.2 mm from table games, and $4.4 mm from poker provided by Mount Airy’s PokerStars partnership.

While Mount Airy was the only operator to derive any money from sponsoring online poker, Rivers Philadelphia was the total iGaming revenue leader with $11.8 mm.

It was followed by Hollywood Casino ($8 mm), Mount Airy ($7 mm), Parx ($6.3 mm), and Mohegan Sun ($537,861).

Fantasy sports, VGTs represent niche growth

Fantasy sports and truck stop VGTs are much smaller revenue generators, but 2019 also marked a growth year.

Ten different fantasy contest sites combined for $25.9 mm in revenue, up 69% from the year prior, with DraftKings ($13.4 mm) and FanDuel ($11.6 mm) leading the way.

Qualifying truck stops only began offering a maximum of five VGT machines similar to slots in August, and the 20 that had them by year’s end combined for $2.3 billion in revenue. Dozens more sites are expected to start up in 2020.

All told, barring some unforeseen repeat of the Great Recession that shakes the country and gambling industry, it would be wise to bet on Pennsylvania setting a new revenue record once all the numbers are tallied a year from now.

Photo by Roy Boyce / Shutterstock.com

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Gary Rotstein

Gary is a longtime journalist, having spent three decades covering gambling, state government, and other issues for the Pittsburgh Post-Gazette, in addition to stints as managing editor of the Bedford (Pa.) Gazette and as a reporter for United Press International and the Middletown (Conn.) Press. Contact Gary at [email protected].

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