It is expected that any day now — maybe even any hour now, although Penn Bets would like to believe its industry contacts would give us a healthier heads-up than that — it will be possible to make a mobile or online bet via a regulated sportsbook in Pennsylvania.
SugarHouse Casino, which has the built-in advantage of having operated its Play SugarHouse sports betting site in New Jersey since last August, will likely be the first to launch in PA, and insiders indicate that Rivers Casino, which falls under the same Rush Street Gaming umbrella, will follow soon thereafter.
Maybe they’ll go live this week. Maybe next week. Parx Casino representatives have noted that they expect to be ready in early June.
One way or another, Pennsylvanians should expect to have plenty of options and odds-shopping opportunities throughout the summer.
What the industry shouldn’t expect is to know anything meaningful about the Pennsylvania sports gambling market’s ceiling until at least September.
Brick and stuck
Pennsylvania’s sports betting numbers without online/mobile have been, in a word, meh.
In April, total handle at the eight brick-and-mortar books in the state was $36.76 mm — the second highest total, behind March’s $44.52 mm figure, for any month since the first PA books opened last November.
The hold was a strong 11.5%, leaving total revenue of $4.22 mm — of which 36%, or $1.52 mm, went to the taxman.
The tax rate is higher in PA than in any other state that has legalized sports betting, with the exception of Rhode Island and its jaw-dropping 51% cut for Uncle Sam.
Pennsylvania also requires a hefty $10 mm license fee for all prospective sports betting venues.
So let’s look at Rivers Casino, which was tops in the state in April with sports betting handle of $8.16 mm and revenue of $872k. Rivers made $558k after taxes. At that rate, not counting the internal costs to run the sportsbook from day to day, it would take 18 months to pay off the $10 mm license fee.
Elsewhere on the revenue spectrum, Harrah’s Philadelphia made $181k after taxes and would need 55 months at that rate to pay off its license fee.
It’s plain to see that interactive betting is necessary to make sports gambling a worthwhile investment for these operators. Of course, anyone who’s been following New Jersey, which last month produced $313.7 mm in handle thanks to a $254 mm (81%) boost from its thriving online betting industry, already knew that.
Piecemeal release
It should go without saying that online betting numbers for May in Pennsylvania will be meaningless. Assuming a site does indeed launch this month, the number of days it will have been operational will almost certainly be in the single digits.
But even with a full month taking bets in June, the handle numbers won’t tell us much because the various sites are launching in a slow trickle, not a sudden explosion.
Maybe two sites will have been operational for all 30 days of June, another one for 15 days, and a fourth for five days; with a rollout like that, we won’t be able to see the full picture. And that might apply to July as well.
Consider the New Jersey betting handle numbers: In August 2018, with sites gradually rolling out of the course of the month, online handle was $21.71 mm; in September, it was $104.89 mm.
That still wasn’t a fully mature market in September, but it was close enough that we could make credible interpretations based on the figures.
The dog days of sports betting
Even if all of the sites launched simultaneously on June 1 and the PA sports betting marketing machine did a perfect job spreading the word, the handle and revenue would still be somewhat limited for one obvious reason: Summer is the sports world’s slowest season.
PA mobile sportsbooks missed their window for local fans to bet on the 76ers in the NBA playoffs, and most if not all will be too late for betting on the NBA Finals. The same goes for the Stanley Cup Finals in the NHL.
What do sports fans have to bet on in the summer? Baseball, golf, tennis, and a handful of less mainstream options. There will be preseason football by August, too. And NFL futures betting should pick up that month. But in the grand scheme, we’re looking at interest in the Phillies (currently leading the NL East by 2½ games) and Pirates (would make the playoffs as a Wild Card team if the season ended today) to carry the load.
Look back at those 2018 New Jersey figures. Handle quintupled in September, not only because there were more sites to bet on, but also because September is when professional and collegiate athletes alike start playing a little sport called football.
Whenever online sports betting goes live in the Keystone State, whether it’s tomorrow, next week, or it unexpectedly gets bumped back to June, we won’t really know anything until September. The summer is preseason; the fall is when the real games begin.
And that’s why all of the online sportsbooks that aren’t SugarHouse or Rivers shouldn’t panic. The first-mover advantage figures to be temporary. It’s whoever has the best digital sportsbook, with the best odds, promos, and interface, that will rise when NFL season kicks off.
Photo by Eric Hartline / USA Today Sports
