Nevada is the sports betting capital of America. And New Jersey is our nation’s online gambling capital.
But if either of those states takes a quick, nervous glance in its rearview mirror, it’ll see Pennsylvania closing the distance rapidly.
While the far-reaching impacts of the COVID-19 crisis have rendered many states’ gambling revenue numbers less instructive than they would otherwise be, there still is much to be gleaned from the March and April reports. And particularly in Pennsylvania, we can see clear evidence of an online casino/poker industry that is growing more rapidly than any other and a sports betting business that is perhaps ready to move into the pole position as soon as the next month or two.
Back in early November, before most Americans had any clue what a coronavirus was and when in-person industry gatherings were still the norm, Parx Casino Senior Vice President of Interactive Gaming and Sports Matthew Cullen predicted with confidence at a SeventySix Capital conference in Philadelphia that this day was coming.
“In the next year, maybe two years, Pennsylvania will become the biggest sports betting market in the country,” Cullen said. “I think it’s only a matter of time, with the population here, that it moves ahead of all other states.”
The latest figures suggest that, if anything, Cullen’s time frame might have been too conservative.
Zooming up the sports standings
Because Cullen referred specifically to sports betting and not online casino games (which had only launched in PA four months prior to the November 2019 conference), let’s start there.
In 2019, New Jersey, propelled by a wide-open online sportsbook market, closed much of the gap on Nevada for title of top sports gambling state. Nevada finished the calendar year No. 1 in betting handle with a record $5.3 billion, while the Garden State attracted $4.5 billion in bets.
Pennsylvania was a very distant third with just shy of $1.5 billion in sports wagering handle.
But as Cullen noted, PA has a larger population than the states it’s trying to catch, at 12.8 million people, more than New Jersey (8.9 million) and Nevada (3.1 million) combined. So as the sports betting market has gradually matured — online sports betting launched exactly one year ago this Thursday — the Pennsylvania betting handle has continued narrowing the gap.
In February, PA saw 66.7% as much betting as NJ, trailing by a tally of $494.8 million to $329.8 million.
In March, Pennsylvania’s $131.3 million in handle during the first month in which the pandemic began shutting down sports represented 72.5% of New Jersey’s $181.9 million.
Fast-forward to April, when every penny bet on sports was wagered online due to casino closures, and Pennsylvania’s handle was $46 million. In a vacuum, that seems a low figure. But compared to New Jersey, it was the highest score yet for PA, at 84.2% of the $54.6 million bet on the other side of the Delaware River.
No NFL draft betting? No problem
There’s an asterisk attached that makes Pennsylvania’s April figure even more impressive. In a world with very little in the way of sports to bet on, the most mainstream event on the April calendar was the NFL draft. But whereas New Jersey sportsbooks were allowed to offer draft betting, PA books were not.
Of the $54.6 million in handle generated in NJ last month, $4.4 million was on “completed events” in football. And the draft was the only event completed in that sport last month.
So if you take away NFL draft betting, Pennsylvania’s handle was 91.6% of New Jersey’s.
It’s entirely possible, given this trajectory, that PA will be No. 1 in May.
At this point, it’s hard to imagine Pennsylvania not being the top sports betting state throughout football season.
Pennsylvania boasts two separate ravenous NFL fan bases supporting teams that, on paper, are more likely to contend for playoff spots than the New Jersey-based teams. Combine that with the likelihood that a substantial percentage of would-be Vegas tourists will be reluctant to enter casinos this fall even if they’re all open, and the ingredients are in place for a sports betting handle throughout the fall that ranks Pennsylvania first, New Jersey second, and Nevada third.
NJ still the online casino king
There are far fewer states competing for the top spot in online casino and online poker revenue, but the gap between top state New Jersey and runner-up Pennsylvania is greater there.
Both states are on the rise since stay-at-home orders were first issued, and in April, New Jersey scored $80 million in revenue and Pennsylvania posted $43.1 million — both state records.
Percentage-wise, PA is climbing faster. New Jersey’s online casino industry improved 23.5% from March to April, whereas Pennsylvania’s shot up a staggering 77.4%.
Remember that online casino games were slow to take root in the first few years in NJ after launching in 2013. It took time to communicate the message that “this is here, and it’s legal.” In Pennsylvania, aided by pandemic-related boredom and new sites recently launching, the curve is steeper. And with the New Jersey online casino market much closer to maturity — in fact, with summer weather arriving, it’s possible that April’s $80 million in revenue will stand as a record for a while — the relatively new PA offering has considerably more room to grow.
Let’s just say, hypothetically, that both states continued growing at their March-to-April rates. That would mean New Jersey wins May, $98.8 million to $76.4 million. And it would mean by June, Pennsylvania would be No. 1, $135.6 million to $122 million.
It’s an absurd hypothetical, of course. Neither will replicate the growth rates enabled by going from a half-month of lockdown to a full month stuck indoors. Pennsylvania is not going to pass New Jersey in June.
But by the end of 2020? With a 44% larger population, with more games and options to be added, with room for more poker sites?
Yes, Pennsylvania is on track to be the home of the United States’ largest online casino market, as well as its leader in sports betting action, when the calendar flips to 2021.
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