In the middle of a major week of gaming expansion in Pennsylvania that saw DraftKings launch its mobile sportsbook in the state and PokerStars deal the commonwealth’s first legal online poker hand, experts from the sports and gambling realms gathered at Citizens Bank Park in Philadelphia to assess where these industries are heading.
In the eyes of Matt Cullen, Parx Casino’s senior vice president of interactive gaming and sports, the trajectory is clear.
“In the next year, maybe two years, Pennsylvania will become the biggest sports betting market in the country,” Cullen claimed Wednesday at SeventySix Capital’s Sports Innovation Conference & Pitch Competition. “Pennsylvania is the second largest gaming state in the U.S., so I think it’s only a matter of time, with the population here, that it moves ahead of all other states. It’s just a matter of time before Pennsylvania eclipses New Jersey and Nevada in sports betting.”
The most recent Pennsylvania revenue report showed that September 2019 was the biggest month yet in terms of betting handle, with $194.5 mm in wagers. That’s an encouraging number less than a year after the state’s first legal sportsbook opened. But Pennsylvania still has a long way to go; that handle figure is dwarfed by New Jersey’s $445.6 mm and Nevada’s $546.3 mm.
Perhaps the most telling statistic is that 81% of the September sports bets in Pennsylvania were made online.
Parx is not seeing quite that same split yet; in September, the casino attracted $13.8 mm in online bets and $7.3 mm in retail wagers, for about a 65/35 breakdown. That retail number was tops in the state.
“We’ve seen a completely different demographic coming in since we launched sports betting in January,” Cullen said. “We’re seeing new customers who never came into the casino before.”
The Pennsylvania sports betting market is nowhere close to maturity yet. These are still the early days, when the first priority should be getting the word out.
“If you go into a bar in Pennsylvania and ask everyone if they know they can bet on sports,” asserted Seth Schorr, the CEO of Las Vegas-based Fifth Street Gaming, during one of the day’s sports betting panels, “I guarantee you at least half the people will have no idea it’s legal or that they can do it right on their phones.”
Sara Slane, the founder of Slane Advisory and a former American Gaming Association executive, believes one of the keys to continuing to grow the sports betting market — not just in Pennsylvania, but across the country — is educating newcomers and easing them in.
“I kind of understand parlays,” said Slane, who, despite working in the industry, is not an experienced bettor. “But when we get into more sophisticated bets, it can be very confusing, and operators really need to acclimate bettors.” She added that she believes the free-play sports betting apps available in some states where wagering is not yet legal are helping on that front.
“When you go into a sportsbook in Nevada, it can be overwhelming,” echoed Kenny Gersh, Major League Baseball’s executive vice president of gaming and new business ventures. “Where I want to see innovation in the mobile markets is in making them more user-friendly for new bettors.”
What Gersh is describing sounds a lot like what you see in the DraftKings Sportsbook app, where moneyline bets are accompanied by the simple question, “Who will win?” and spread bets come with the words “Who will cover the spread?”
Gersh made an attention-grabbing point about the state of this industry as it finds itself rapidly expanding: “There really is no incumbent in the U.S. sports betting market,” he said. “It’s all new, and we’re all figuring it out.”
As any sector balloons, there are risks to address. Gersh isn’t throwing around the word “integrity” as much as he and other sports league representatives were last year, but it’s clearly on his mind.
“It’s about perception,” Gersh said. “It’s about making sure that fans know that the game on the field isn’t being affected because some guy with a mattress company bet on the Astros.”
Slane sees another potential cause for concern in the risk of having sports betting “too much in everyone’s face.” Greed and excess from the gaming companies could backfire, especially when citizens are still adjusting to having the supposed moral scourge that is sports betting legalized. “Pigs get fat, and hogs get slaughtered,” Slane metaphorically warned.
Slane wasn’t speaking that in that instance about online casino, but the metaphor certainly has application to that growing vertical. She noted that the rapid legalization and expansion of sports betting is proving to be a gateway for these other forms of gaming that have struggled to break through.
“What we’ve seen now is an opening for mobile gaming through the lens of sports betting, but where we’re really seeing the money come in is in online casino,” Slane said. (There are four PA online casinos, and counting, with the addition of the PokerStars Casino this week.) “We’re starting with sports betting, but where the real money’s going to be generated is with online slots. It couldn’t have been a better thing for the industry, for sports betting to open the door and lead the way. Now I think you’re going to see a lot of innovation in the casino industry. It’s going to be a massive change for the casino industry.”