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Pennsylvania Online Gambling Revenue: A Billion-Dollar Opportunity

In partnership with OnlinePokerReport.com, PlayPennsylvania.com has produced “Regulated Online Gambling: A Billion-Dollar Opportunity For Pennsylvania.” This free paper (available for download at the bottom of this page) provides an objective look at the revenue potential for  Pennsylvania’s casinos as well as the tax potential for the state.

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Highlights from the paper follow.

Pennsylvania casinos gain revenue from a largely new market

The casinos spread across Pennsylvania all stand to benefit significantly from regulated online gambling. Our projections call for first year revenue of $230 million, increasing to $364 million annually at peak. These projections are broadly consistent with the performance of New Jersey’s legal online casino market. Critically, numerous pieces of evidence suggest that this revenue will largely be new revenue from new customers, and not simply a reshuffling of existing casino revenue.

 

Projected annual revenue from PA online gambling:

$364 million

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Hundreds of millions in revenue flows to the state

Pennsylvania would see an estimated $426 million in tax revenue through 2022 if the state were to authorize regulated online gambling in 2017. There are three primary sources of revenue from regulated online gambling for the state:

Upfront fees

Upfront license fees would immediately inject over $100 million dollars into the state budget, allowing PA to balance the budget without new taxes.

Revenue tax

Revenue taxes would generate tens of millions a year, providing a steady stream of reliable revenue for the state moving forward.

Renewal fees

License renewal fees ensure that the state is receiving sufficient funding to cover the cost of regulating online casino and poker games.

 

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Online gambling will generate over $425 million in taxes for PA through 2022. Learn how. Click To Tweet

 

Casino games will drive bulk of the action

While pending legislation would authorize both online casino games and online poker, it’s casino that will drive the bulk of the revenue in Pennsylvania. Our projections call for casino to generate some 90% of the total revenue from PA online gambling by 2022.

 

Projected annual revenue from PA online casino:

$329 million

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Online poker will contribute, but faces questions

Players

Pennsylvania is a large state, but still a relatively modest one in terms of the number of unique poker sites the market can support. If too many rooms spread that player base too thin across the state’s online poker rooms, the market at large could suffer.

Taxes

Online poker is more sensitive to high tax rates than house-banked games like slots and roulette. A high tax rate could create conditions that stop players from participating, weakening the sustainability of the market and harming the revenue potential of poker.

Interstate

Will PA join forces with other states that have legal online poker? If the player base can expand to include populations in New Jersey, Nevada, and Delaware – along with any states that follow PA – online poker in all participating states would benefit.

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