Since online sportsbooks launched in Pennsylvania, about 90% of all bets have been online. Still, casinos proceeded to spend millions of dollars building state-of-the-art sportsbooks. Pennsylvania-based Penn National Gaming leveraged the Barstool brand to build Barstool Sportsbooks at two new mini-casinos in 2021. A Barstool Sportsbook at Hollywood Casino at Penn National Racecourse opened in March 2022 in time for March Madness.
There are various reasons casinos have invested funds and precious gaming floor space on retail sportsbooks. At some casinos, sportsbooks drive cross-sell to table games and increase traffic.
Sportsbooks attracting new customers, increasing revenue
Penn National Gaming often cites how retail Barstool Sportsbooks increase visitation of a younger demographic.
“Our retail Barstool Sportsbook concepts have stimulated database growth and increased frequency of visitation in the younger segments, while boosting gaming and food and beverage spend,” said CEO Jay Snowden.
Barstool Sportsbooks were said to be “highly profitable and provide significant opportunities for cross-sell,” during Penn National Gaming’s Feb. 2022 earnings call.
During Penn National Gaming’s Q1 2022 earnings presentation, they noted that Barstool Sportsbooks are helping maximize cross-sell opportunities. Comparing Q1 2019 vs. Q1 2022 in properties with retail sportsbooks, Penn National has seen a 53% increase in table game Theo for ages 21 to 44. Theoretical win (Theo) is the expected house win for a player, based on the total amount wagered by the player and the game played.
Play Pennsylvania reached out to some PA casinos for comment. However, they said they could not offer any remarks outside of those made during investor calls.
FanDuel Sportsbook at Valley Forge Casino
The FanDuel Sportsbook is only 1,800 sq. ft, and Valley Forge Casino is one of the smallest casinos in Pennsylvania. The retail sportsbook opened in March 2019 and benefits from the power of the FanDuel name and the proximity to the Main Line, one of the wealthiest zip codes in the country.
Boyd Gaming CEO and President Kent Smith said during Q2 2019 earnings call:
“As we look at sports betting for our properties in Mississippi and Valley Forge, the profit is nice and it’s incremental but it’s really about the incremental traffic that it drives into the building that supports the casino, whether it be table games or slots that support the restaurants and support other parts of the building. We’ve seen good traction. It’s really about traffic generation for us.”
Cross-sell from retail sportsbooks
Other operators reported strong cross-sell due to retail sportsbooks.
MGM
MGM CEO Bill Hornbuckle said during the company’s recent earnings call:
“In 2021, 42% of our new database enrollments came from BetMGM. We envision that this rapidly growing group of omnichannel customers will be able to traverse seamlessly between our online and offline offerings.”
Caesars
In 2019, Caesars touted the benefits of sportsbooks at casinos. At Harrah’s Gulf Coast Casino in Biloxi Mississippi, the property had experienced a month-over-month attendance increase of 10%, a 300% rise in beverage sales and improved overall gaming revenue from new-to-brand and re-activated customers as a result of the new sportsbook.
“The sports betting landscape continues to evolve and Caesars Entertainment is leading the industry by offering new and innovative ways for fans to engage with sports-related content while placing their bets in a sports book or through a mobile app,” said Christian Stuart, Executive Vice President of Gaming & Interactive at Caesars Entertainment.
During Caesars Q3 2021 earnings, CEO Tom Reeg said they saw an “extremely” high uptick in sign-up for Caesars Rewards and cross-visitations.
“One of the areas where we’re particularly active is the high end of the market, large bettors that are new to our system, where we’re willing to take large sports bets, and we’re seeing those customers make their way into our high limit rooms.
How much does it cost to build a sportsbook?
The first legal sports wager in Pennsylvania was placed on Nov. 15 at Hollywood Casino at Penn National Race Course. PA casinos set up temporary spots before building larger, permanent sportsbooks.
Here’s a timeline on when some of them opened, along with their price tags:
- Aug. 2019 Parx Casino Sportsbook: $10 million
- Sept. 2019 Rivers Casino Pittsburgh Sportsbook: $5 million
- Oct. 2019 Rivers Casino Philadelphia Sportsbook: $5 million
Lead image of Barstool Sportsbook at Hollywood Casino Morgantown by Katie Kohler