DraftKings and FanDuel achieved large-scale success in contrasting fashion with their online sports betting operations in Pennsylvania last month.
The September revenue figures released Tuesday by the Pennsylvania Gaming Control Board showed DraftKings closing the betting handle gap against its longtime rival in dramatic fashion. DraftKings took $205.6 million in bets compared to $211 million for FanDuel, a gap of $5.4 million compared to $40.2 million in August. DraftKings more than doubled its betting volume — by 126.7% — from August.
At the same time, FanDuel continued to dominate all competing sportsbooks, as well as its own customers, in the revenue department. It took in $32.9 million in gross revenue and reported $22.2 million in taxable revenue after adjusting for its promotional credits. Those revenue figures were about twice as much as what DraftKings claimed.
The shift in the longtime FanDuel-DraftKings rivalry stood out in a strong month overall for statewide commercial gaming revenue, in which sports betting plays only a small part despite the ubiquitous advertising that promotes it.
All forms of commercial gaming combined for $448.5 million in revenue in September, the board reported, up from $425.4 million in August and $415.7 million in September 2021. The gaming generated tax revenue of $182.1 million for state and local governments.
As the key months of the football season got underway, sports betting activity surged from the summer, with a statewide handle of $645.2 million generating gross revenue of $75.3 million and a taxable figure of $50.2 million. The revenue figures were the second highest ever.
Online casino revenue of $112.7 million was also unusually strong, while retail slots and table games revenue of $280.1 million represented a relatively flat performance.
Another record sportsbook win rate
The $645.2 million in sports betting wagers amounted to a 77.7% increase from the volume in August.
A huge boost always comes from football season, but it was nonetheless striking in comparison to September 2021, when the $578.7 million in handle was up 66% from the month before. If it’s like last year, betting volume will only increase in the coming months, as handle exceeded $700 million each month from October 2021 to January 2022.
The large increase in betting is partly driven by the heavy inducements that accompany football season among the major online sportsbooks competing for customers. The $25.1 million collectively from such welcome offers, bonuses, and boosts last month was the most ever reported in the state.
With their strong revenue performance, operators clearly had no trouble making up for those offers. The $75.3 million in gross sports betting revenue, with $50.2 million of it taxable, was only exceeded in November 2021, when $84.9 million and $63.7 million were reported.
The $75.3 million gross from $645.3 million wagered reflects a hold rate (the percentage the sportsbooks retain from customers’ bets) of 11.7%, setting a record for the second straight month after 11.6% was retained in August.
FanDuel’s hold rate from online bettors was even higher at 15.6%, explaining its massive revenue compared to competitors. DraftKings’ hold rate was 8.2% in reporting $16.8 million in gross revenue and $11.1 million taxable from online wagers.
In its customary third-place position in Pennsylvania, BetMGM had $50.9 million in handle, $6.2 million in gross revenue, and $1.9 million taxable.
Barstool Sports often trails BetMGM in handle but exceeds it in revenue due to giving away fewer promotional credits, which was the case again last month. It reported $39.5 million in handle, $3.8 million in gross revenue, and $2.8 million taxable.
Combined, those four major online sportsbooks represent about 85% of betting activity in the state each month.
Online operators show increase unlike retail venues
The $112.7 million in iCasino revenue was 5.1% more than in August, even though September had one fewer day. It broke down as $77.9 million from online slots, $32.2 million from table games, and $2.7 million from iPoker. The monthly revenue was also 15.2% higher than in September 2021.
The same type of increases could not be said for the 16 brick-and-mortar casinos, which is one more than was operating in September 2021. They combined last month for $280.1 million in gaming revenue, which was up slightly from $279.7 million in August but less than the $283 million a year earlier, when Hollywood Casino Morgantown was not part of the action.
Photo: Gary Rotstein
