The Pennsylvania sports betting industry is mature, yet handle and revenue continue to grow, even during slower months.
Last month happened to be the best July ever in both categories in the Keystone State.
Promotional spend was up between 79% and 100% in Pennsylvania, Michigan, Connecticut, and Kansas, according to the Earnings+More newsletter. Locally, Pennsylvania sports betting displayed an increase of promotions at a 93.2% rate from July 2023.
The large uptick in promotion spend resulted in a huge July for the Keystone State.
PA sportsbooks spend money to make money
July is easily the slowest month of the sports calendar with only MLB taking center stage. Handle in Pennsylvania, along with other states, usually suffers because of the light schedule.
However, July proved to be a big month in Pennsylvania. Keystone State operators produced $414.6 million in handle and $52.7 million in PA sports betting revenue, both records for the month of July.
A big part of the rise in production can be attributed to the increase in promo spend last month. Pennsylvania sportsbooks distributed $14.2 million worth of promos to bettors a month ago, which is also a record. Operators did not come close to spending that in previous July’s:
- 2021: $7.6 million
- 2022: $7.9 million
- 2023: $7.3 million
- 2024: $14.2 million
The Earnings+More newsletter provided some commentary on the increased promo spend, courtesy of Deutsche Bank:
“The Deutsche Bank team suggested the “influx” of promotional spend across the four states is partly down to operators ‘priming the pump’ ahead of a clutch of ‘considerably more challenging’ comps in the months ahead.”
With a competitive football season ahead, perhaps operators decided to spend even more in the slower months.
What promo spend could look like in September
NFL and college football are in full swing in September, and that’s usually when sportsbooks start distributing promotions at a higher rate. Spend has increased gradually over the last three September’s:
- 2021: $19.9 million (578.8 million handle)
- 2022: $25.1 million (645.2 million handle)
- 2023: $29.5 million (726.3 million handle)
While promo spend increased, so did handle, which is not a terrible surprise. Could Pennsylvania sportsbooks cross the $30 million threshold in promotional spend this September? Deutsche Bank is also curious.
“Deutsche Bank said it will be ‘interesting’ to see how the industry approaches a setup with tougher handle comparisons and hold tailwinds that are ‘likely to be more modest, relative to this time last year,'” Earnings+More newsletter.
“At the same time, it is ‘attempting to put forth a message of more discipline around same-store promotional spend,'” it continued.
It’s possible that sportsbooks, with football season being so competitive, scale back on promos this fall. It remains to be seen whether that happens, and what kind of impact it’ll have on handle.
