Sportsbooks in Pennsylvania utilize most of the summer gearing up for what is usually a busy fall with the NFL and college football in full swing. Sportsbooks spent $29.5 million in promotions this September, which set a new record for the state.
While it’s not surprising that PA online sportsbooks committed just a fraction of that over the summer, it is interesting to see how operators are remaining relevant despite a mature market.
PA sportsbooks set record for promos this September at $29.5 million
During the summer, promotional intensity from sportsbooks is slowed because of a scarce sports calendar. Over the years, that picks up in September when college football and NFL teams start hitting the field. Pennsylvania sportsbooks have seen an increase in promotional spending over several years in the month of September. Here are its monthly promotional credits by year since 2020:
💰 2020: $12 million
💰 2021: $19.9 million
💰 2022: $25.1 million
💰 2023: $29.5 million
The market leaders in the Keystone State, by no surprise, are FanDuel Sportsbook PA and DraftKings Sportsbook PA. Here’s what each operator spent on promo credits in September:
- DraftKings: $11.5 million
- FanDuel: $11.1 million
Together, both platforms accounted for 77% of the promo spend and, ironically, 77% of the sports betting revenue for last month.
Reasons for PA online sportsbooks to increase promo spend
As the fifth full season of football wagering kicked off in September, it’s no secret that Pennsylvania is a mature sports betting market. Despite that, the Keystone State set a handle record last October, taking in $797.1 million in total bets. It continued to put up impressive numbers for the rest of 2022:
- October 2022: $797.1 million
- November 2022: $789.2 million
- December 2022: $754.8 million
However, as the handle stayed above $750 million, promotional spend gradually decreased in the months following:
- September 2022: $25.1 million
- October 2022: $21 million
- November 2022: $17.1 million
- December 2022: $16.6 million
As sportsbooks reported $726.3 million in September 2023 handle, promotional spend increased dramatically to $29.5 million. To remain one of the top sports betting states, sportsbooks need to find ways to keep customers engaged.
Since DraftKings spent the most in promotions, the company has not hidden the strategy of cross-selling sportsbook players into its online casino platform. DraftKings reported revenue of $875 million during a Q2 2023 earnings call, a year-over-year increase of 88%.
CEO Jason Robins said on an earnings call in August:
“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.”
More promotions on the sports platform are going to help its online casino products, like DraftKings Casino PA, as Robins explained. It’s what assisted the company in becoming the online gambling leader in the US.
FanDuel, DraftKings continue to dominate Pennsylvania online sports betting market
The two operators continue to take hold of online sports betting in the Keystone State. Despite DraftKings securing the No. 1 gambling platform, FanDuel is still the top sports betting operator in Pennsylvania, with DraftKings right behind.
FanDuel has generated $8.9 billion in lifetime handle and $864.4 million in lifetime revenue. DraftKings is second in each category, recording $5.7 billion and $366.5 million, respectively.
Combined, each app is responsible for 61% of lifetime handle and 63% of lifetime revenue in Pennsylvania. While that doesn’t seem to be changing anytime soon, the market is going to see some new faces. As Barstool leaves gaming, PENN Entertainment is unveiling ESPN Bet some time in November.
Fanatics Sportsbook, which has already taken over PointsBet’s operations, is expected to launch its own sportsbook in the near future. With its tie to the sports merchandise industry, the new operator would have one of the most unique promotional offerings.
ESPN and Fanatics are two of the most well-known brands in the sports industry. It’ll be interesting to see if they can compete with the market leaders of Pennsylvania.
