Sportsbooks in Pennsylvania reported a record-breaking November in more ways than one. Operators produced $934.1 million in handle, an all-time high, and also distributed $36.3 million in promotional credits.
The November promo spend shatters the record the state originally set in September, when operators recorded $29.5 million.
There are multiple PA online sportsbooks that contributed to the record month. However, one new sportsbook that entered the market in November accounted for a majority of the promo spend.
PA online sports betting sets another promo spend record at $36.3M
It’s no surprise that the football months of September through December are when sportsbooks raise the bar in promotional spend. Here is what the promo spend looks like in the summer months compared to the fall this fiscal year:
- July: $7.3 million
- August: $8.6 million
- September: $29.5 million
- October: $25.5 million
- November: $36.3 million
FanDuel Sportsbook PA and DraftKings Sportsbook PA dominate most facets of the sports betting market, including handle and promo spend. When the state broke the record in September, the two operators accounted for 77% of the total spent on promotions.
Barstool’s exit and the emergence of ESPN Bet PA in November largely contributed to the highest promo spend in history. To entice players to wager, ESPN Bet spent $14.8 million in promotions. Despite taking in $66.8 million in total bets, the operator lost $7.8 million in November.
In terms of promotional credits, ESPN Bet ranked ahead of the PA industry leaders in November:
- ESPN Bet: $14.8 million
- FanDuel: $10.7 million
- DraftKings: $6.1 million
DraftKings spent a little more than half the amount of September’s total of $11.5 million.
Together, DraftKings and FanDuel accounted for just 46.2% of November’s spend on PA sportsbook promos.
How ESPN Bet has fared since launching a Pennsylvania online sportsbook
PENN Entertainment launched ESPN Bet in the middle of November, which makes it difficult to judge performance. The Pennsylvania Gaming Control Board (PGCB) reported that the combination of Barstool and ESPN Bet PA recorded a 7.6% revenue share in November.
However, the Earnings+More newsletter is reporting that ESPN Bet acquired 9% of the market share since debuting.
December revenue figures are coming out later this month for the sports betting industry. It’ll be then that we’ll have a much better grip on ESPN Bet’s performance in the Keystone State.
The early stages have ESPN Bet behind the following operators in terms of November gross gaming revenue (GGR) in both verticals, according to Earnings+More, which is not a surprise. PENN’s Hollywood Casino is housed within the ESPN Bet app in Pennsylvania:
- FanDuel: 29%
- DraftKings: 26%
- BetMGM: 11%
- Penn/ESPN Bet: 5%
While early returns don’t appear to be great, it’s still too early to write off ESPN Bet, says Earnings+More:
“The patchiness of the data so far on ESPN Bet’s launch – only half a month, high levels of promo spend, variance between states – has meant that those on each side of the debate over its chances of succeeding on its own terms have something to chew on, suggested the team at Wells Fargo.”
It’s unlikely that promo spend will exceed $30 million for Pennsylvania in December. However, it’s mostly up to PENN Entertainment’s rollout plan of ESPN Bet.
Record-breaking sportsbook outputs help Pennsylvania online casinos
PA online casinos also benefit from sportsbooks producing record numbers in November. Most casino platforms are merged into the sportsbook apps that players have on their phones. More sports betting equates to more people crossing over into the online casino.
Online platforms proved that theory when operators broke another US record in November, generating $191.9 million.
Multiple operators in the Keystone State have improved their cross-sell strategies to drive revenue in both verticals. BetMGM recently invested in Angstrom Sports to enhance its sportsbook to help cross-sell into its BetMGM Casino PA.
DraftKings has spent several earnings calls discussing sportsbook crossover into DraftKings Casino PA and its platforms across the US. DraftKings CEO Jason Robins said on a Q2 2023 call:
“It’s kind of like this halo effect of when you retain better and cross more people into the NBA on the sports side, that then has some spill-over effect on iGaming. More active players on the online sports betting platform cross-sell into active players on the iGaming products. So that’s really, I think, what I would attribute to Q2.”
Hollywood Casino PA is merged with ESPN Bet, so the more people bet on sports, the more likely it is that they will crossover into the casino.
Despite sportsbook promotions helping with crossover, ESPN Bet will have to tone it down at some point and develop effective cross-sell strategies to earn a profit.
