The second full month of brick-and-mortar casino closures in PA equated to another month of no retail gaming revenue. But online gaming once again delivered on expectations to soften the blow.
Following record iGaming revenue of $43.1 million in April, PA online casinos experienced another leap in May, climbing to $55.8 million, according to figures released by the Pennsylvania Gaming Control Board (PGCB) on Tuesday. It was a 35.5% month-over-month increase for online casino (tables and slots) revenue in the Keystone State.
Online poker’s contribution, all from PokerStars PA, was $4.6 million, a 12.5% drop from a record $5.3 million in April.
Online casino numbers in May:
- Slots brought in nearly $1.1 billion in total bets and $38.8 million in revenue
- Table games attracted $778.5 million in wagers and $12.4 million in revenue
- Poker’s May revenue was $4.6 million
- May was the first full month for Caesars and DraftKings online casinos
Continued growth for PA iGaming market softens revenue blow
More telling of overall iGaming traffic in Pennsylvania, online casino wagers were up 32.6% month over month. That included a whopping $1.06 billion in slot play and nearly $780 million in total table games wagers in May.
For slots, it was an increase of 40.5%, while table games wagers saw a 23.1% month-over-month increase. Poker’s 12.5% decrease month over month is minor in the grand scheme. The three verticals together brought in $24.0 million in state and local taxes in the Commonwealth. Overall, PA took in $25.8 million in tax from all forms of gambling.
As impressive as the young online casino market in PA is performing, it’s hardly enough to make up for the major losses in gaming across the state. Year over year, overall gaming revenue was down 79% in May.
In May 2019, online sports betting was in its infancy and iGaming was yet to launch. But land-based casinos alone brought in over $286 million in gaming revenue. Land-based slots accounted for $209.6 million, and table games posted $76.6 million in revenue. In April and May 2020, these forms of gaming fell to zero, meaning no tax dollars either.
The road to recovery for PA casinos has begun
After a rough three months of financial fallout caused by coronavirus-induced closures, the PA gaming industry is slowly entering the recovery and reopening stage. But it won’t happen overnight.
Land-based casinos started to reopen last week , with Rivers Pittsburgh and The Meadows welcoming back guests on June 9. Lady Luck Nemacolin followed a few days later on June 12. More PA casinos are slated to open soon. Hollywood Casino is set to open on Friday, June 19, and two other casinos will be in the green phase on Friday. That leaves six casinos lagging in reopening, but likely not too far behind.
PGCB executive director Kevin O’Toole noted in last Wednesday’s board meeting that the first reopenings went “very well.” Though it is early to tell, demand for live gaming seems strong, and PA casinos are complying with the extensive PGCB reopening safety protocols.
Normalcy returning to PA gaming, and revenue with it
Part of the mandate is to reopen at 50% capacity, which all three casinos thus far have done. Limited capacity and limited seating to allow for social distancing means less traffic and less revenue than in pre-pandemic days. But it sure beats zero revenue flow, and it is a good start.
During the reopening of Rivers Pittsburgh, general manager Bill Keena was asked bluntly if the casino could still be profitable at 50% capacity.
“Yes, absolutely,” said Keena. “If you would have asked me two months ago what level of business [we would be at], I would have said 30%. There is no way we are going to be at that. I think we are going to be at 65–70%. I think we’ll be back to a sense of normalcy rather quickly.”
The gradual return of major sports and sporting events will help too. Online sports betting in PA is already seeing an uptick as more events are added to the calendar. Slowly, retail sports betting is making its return to the Commonwealth. Simulcast horse betting and horse racing in PA is just getting back on track, too.
Overall, signs of recovery should come more into focus in June’s revenue report, with a more significant rebound to follow in July and beyond.
PA online casinos hitting their stride
Meanwhile, PA online casinos are hitting full stride less than a year after the first sites launched in July 2019. More operators trickled in over the following months, but it wasn’t until 2020 that iGaming options became numerous in PA. There are now 10 online casinos live and operational within state borders.
And there’s never been a better time to have iGaming options in play. Even as most states have had extensive weeks of zero gaming revenue, PA’s limited revenue has not been insignificant.
To put it into perspective, NJ online casino, which launched in December 2013, did not cross the $50 million revenue threshold until January of 2020. PA reached the mark in less than a year.
Here’s a look at PA iGaming growth since the beginning of 2020. The mid-March mandated shutdown of all brick-and-mortar casinos provided an obvious boost to online gaming.
| May | April | March | February | January | |
|---|---|---|---|---|---|
| Total Play | $1.8 billion | $1.4 billion | $871.6 million | $703.6 million | $466.8 million |
| Revenue | $51.2 million | $37.8 million | $21.1 million | $17.7 million | $11.8 million |
| Tax Revenue | $23.2 million | $16.5 million | $8.1 million | $6.5 million | $4.6 million |
Online poker flourishes in PA with one operator
PokerStars PA remains the only operator in the Keystone State, though that is likely to change in the coming months. Still, TSG (The Stars Group) is enjoying its position and taking full advantage.
Online poker revenue has been climbing in PA. It peaked at $5.3 million in April, and May saw a mild drop to $4.6 million. The drop is minor, especially considering that PokerStars did not host a tournament series in May. It did hold a one-off event, though, Pennsyl-MANIA, which produced the biggest single prize pool ever for PokerStars’ U.S. operations.
PokerStars is about to launch its first-ever Summer Series in PA, which comes with a total of $750,000 in prize pool guarantees. It won’t be surprising if PokerStars’ strong revenue continues even as casinos return, especially since live poker rooms are not yet allowed to reopen in Pennsylvania, per PGCB guidelines.
