Never let it be said that Pennsylvanians don’t love to gamble, whatever the format.
Revenue figures for all of 2020 released by the Pennsylvania Gaming Control Board Tuesday showed, on the one hand, that gaming was down across the state from the year before.
Revenue from all commercial gaming — casino slots and table games, internet casinos, sports betting, fantasy sports contests, and truck stop VGTs — added up to $2.65 billion in 2020, a 22.2% drop from 2019’s record $3.41 billion.
That doesn’t mean Pennsylvanians wanted to gamble less, but that they had less opportunity to do so in person. Brick-and-mortar casinos were shut down for one-third of the year — a collective 1,473 days of closure counted by the gaming board — due to government orders stemming from COVID-19.
The casinos’ slot machines — with revenue also hampered by social distancing concerns that meant fewer were in operation when properties were open since June — kept $1.36 billion in players’ losses last year, compared to $2.36 billion in 2019. The slots revenue had consistently been between $2.3 billion and $2.4 billion every year from 2013-2019.
Blackjack, roulette, craps, and other tables within the casinos, meanwhile, brought just $504.3 million in 2020 revenue compared to $903.6 million the year before. Table revenue had been above $800 million every year since 2015.
The drop of $1.4 billion in land-based casino revenue year to year would have been a huge loss for operators if Pennsylvanians hadn’t shown just how much they were willing to bet online, whether on casino games or sports.
All kinds of new online options arose
The use of computers and smartphones for casino games and sports betting was still in its infancy in Pennsylvania in 2019. That market grew vastly in 2020, so that by year’s end there were 13 different sites for online slots and table play and 12 online options to place a sports bet, plus two additional retail locations.
The iGaming options became even more popular due to casino shutdowns than would have been the case in a normal year, as so many people were discouraged from leaving home and gamblers needed an alternative way to indulge their pastime.
Over the 12 months, the state’s overall sports betting handle amounted to $3.58 billion in wagers, more than 90% placed online. The sportsbooks retained $189.7 million of that as their gross taxable revenue, equivalent to a “hold” of 5.3% from what sports bettors risked.
The iCasino activity was even greater. All told, those within Pennsylvania churned some $20 billion digitally through slots and table games. Fortunately for them, they got most of that money back. The revenue retained by the online casinos amounted to $565.8 million, a little under 3% of what was wagered.
Fantasy sports contests added $21.1 million and truck stop VGTs $16.6 million to 2020’s gaming revenue.
More expansion puts $4 billion within reach
Pennsylvania’s 2017 law that vastly expanded gaming — which added the sports betting, the iGaming, the fantasy contests, and VGTs — resulted in a total of $793.3 million in combined 2020 revenue that would not have existed if the state still had only traditional casino gambling, according to the gaming board.
Looking ahead, such revenue should only grow in 2021.
With the state having more online options for sports and casino wagers than ever before in December, it set new monthly records. The iCasino revenue amounted to $71.6 million. Sports betting revenue surpassed $34 million for the third straight month, on a record monthly betting handle of $548.6 million.
Those kinds of figures could be a baseline for 2021, and if so, those forms of gaming would far surpass the $565.8 million from iCasinos and $189.7 million from sports wagering in 2020. Combined, they could be expected to exceed $1 billion in annual revenue.
Meanwhile, unless the COVID pandemic again disrupts the ability to keep doors open, Pennsylvania’s land-based casino industry is poised for a rebound this year.
The large Live! Casino & Hotel Philadelphia opened this week and could earn annual revenue in the vicinity of $300 million, as other casinos its size do. That kind of volume will become more likely for it and similar properties whenever COVID vaccinations become common, casino capacity and amenity restrictions end, and people feel safe again visiting crowded public spaces.
The one mini-casino so far operating in the state, Live! Pittsburgh in Westmoreland County, only opened in late November and could bring in revenue in the range of $50 million to $100 million in 2021. Penn National Gaming expects to open two more mini-casinos in the second half of the year in York and Berks counties, and their combined revenue from a partial year might be similar to Live! Pittsburgh’s from a full year.
Putting all that potential growth together, if the COVID pandemic eases it’s conceivable that Pennsylvania could see its first $4 billion year from commercial gaming revenue in 2021. That would equate to some $1.6 billion in state and local government taxes, compared to last year’s $1.1 billion, and would go a long way toward helping the state’s budget.
That’s if Pennsylvanians keep showing their same proclivity to gamble. We’re betting they do.
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