Pennsylvania has some confounding oddities about it: the massive size and cost of its 253-member legislature, the unavailability of wine and beer purchase in most retail outlets, this year’s 0-5 start by a college football program that is one of the most prestigious in the nation.
And then there’s the dropoff in November sports betting.
The monthly revenue figures reported by the Pennsylvania Gaming Control Board last Thursday showed the collective betting handle of all the state’s sportsbooks added up to $491.9 million last month, down 6.4% from October’s record $525.8 million.
This might make sense if there were fewer sportsbooks available in November than in the past. Instead, there were more options than ever.
It would be fathomable as part of a nationwide trend of reduced betting in November compared to October. Instead, every legalized sports betting state with a competitive market similar to Pennsylvania’s has reported an increase, if they’ve released new monthly figures thus far.
It could be comprehensible if there were no popular sports being played due to the calendar, COVID-19, or whatever. Instead, November is typically among the top months for sports betting due to football, and in this football-mad state, the key NFL and college teams played more games in November than October.
Very curious indeed.
Usually, it’s a new record every month
Pennsylvania has been on an almost-every-month upward trajectory of sports betting volume since it was first made possible by a combination of speculative October 2017 state law and a May 2018 U.S. Supreme Court decision that struck down the federal PASPA ban on sports betting outside of Nevada.
The first retail sportsbook opened inside Hollywood Casino in November 2018 and the first mobile sports bets were taken the following May.
The number of both options has grown steadily, so that by November there were 14 retail betting sites and 10 online sportsbooks, with the latter representing 91% of total betting volume. (An 11th online site, BetMGM, was just launched last week and not part of November’s revenue numbers.)
The growth in options, the vast marketing of many of those, and the public’s increasing familiarity and comfort with legalized sports betting increased the monthly handle nearly every month before this year’s COVID pandemic. Even when the volume fell from a then-record $348.4 million last January to $329.8 million in February, daily betting activity was actually brisker since the latter month had two fewer days to explain it.
In Pennsylvania and everywhere else in the U.S., sports betting ground to a near-halt in the spring due to limited options from COVID’s impact. That changed in summer and fall, however, as wagering in the state grew from $89 million in June to $164.8 million in July, $365 million in August, $462.8 million in September, and the record $525.8 million of October.
For other states comparable to Pennsylvania that have both mobile and retail betting and have reported November figures, that type of ascent continued. More state records were broken, including New Jersey establishing a new national high of $931.6 million last month. The Keystone State is an outlier.
| State | October sports handle | November sports handle | Change |
|---|---|---|---|
| New Jersey | $803.1 million | $931.6 million | +16% |
| Indiana | $230.9 million | $251.4 million | +8.9% |
| West Virginia | $44.6 million | $48.5 million | +8.7% |
| Iowa | $81.9 million | $87.2 million | +6.4% |
| Pennsylvania | $525.8 million | $491.9 million | -6.4% |
The drop was broad among betting sites
Many things can factor into why states’ betting volume grows. There’s a natural maturation period in each market that breeds growth as public awareness increases and people are drawn to sites for the first time, particularly when lured by advertisement of generous sportsbook welcome bonuses in PA, such as deposit matches and risk-free bets.
But in November’s case, Pennsylvania’s growth fell short compared to both states that predated its own industry (New Jersey, West Virginia) and states that came after (Indiana, Iowa).
It wasn’t like a change by any particular operator or operator type drove the 6.4% decline either. The handle was down both online (5.3%) and retail (16.8%).
FanDuel, DraftKings, and Barstool, the three biggest sites that collectively represent 76.5% of online betting and nearly 70% of total handle in the state, all slacked off. Top operator FanDuel was down 2.4% in monthly handle, and DraftKings was off 9.2% and Barstool 8.7%.
The Barstool drop might have special significance, in that it experienced such decline in just its second full month of operation after a much-ballyhooed September launch by Penn National Gaming.
Sometimes, sports betting volume can be affected by the extent to which the sportsbooks give away promotional credits to help drive action. In the case of DraftKings and Barstool, they both gave away significantly less in November than October — down from $2.3 million to $1.7 million by DraftKings and from $1.8 million to $1 million for Barstool.
Those represent no explanation for Pennsylvania’s overall November decrease in betting activity, however, as the $11.2 million in statewide promotional credits was actually slightly higher than in October.
Decline during football is a head-scratcher
Unlike some other states, Pennsylvania does not break down its betting handle by sport. But it is well-known from historical data in Nevada that football is the most popular sport among U.S. bettors. In Pennsylvania, with large fan bases attached to the Philadelphia Eagles, Pittsburgh Steelers, and Penn State’s program, one would presume it’s even more so the case.
Which is why the monthly report becomes even more mysterious in light of the Steelers having played four games in November compared to three in October, and Penn State playing four games instead of two after a delayed start to its season. The Eagles had four dates in each month.
The COVID-adjusted sports calendar might have made October a busier sports betting month than usual, with the NBA finals being played and a lengthy baseball postseason. But that would have been true also for sportsbooks in other states that saw no overall dropoff in November after those sports had ended.
The gain in the number of college football games played across the nation in November compared to October also should have made up for the absence of other sports, but for whatever reason that did not add up positively in Pennsylvania.
It’s not like sports betting is suddenly an unpopular activity — Pennsylvania is still the third biggest legal betting state behind New Jersey and Nevada, though it could be challenged before long by sizable industry newcomers Illinois and Michigan. And revenue-wise, the sportsbooks did collectively generate a record $37.4 million in November, with $13.4 million of that dedicated to state and local taxes.
But now the question becomes whether that’s a plateau. With BetMGM’s arrival in the online market and with the NBA starting up this week to join college basketball, it will be extremely interesting in mid-January to find out if Pennsylvania betting activity bounced back in December — or at least followed whatever trend the rest of the nation followed.
Or will it again be a puzzle wrapped around an enigma, similar to how the borough of North East, Pa., is located in the most northwestern part of the state? (Trivial answer: It’s in the very northeastern part of Erie County, but still … )
