Pennsylvania is the second largest US Gambling Market

In the 13 years since its first casino opened, Pennsylvania has solidified its status as the second-largest gambling market in the United States, second only to Nevada. The state's gambling industry is robust, with no signs of slowing down.

• Record-Breaking Revenue: Pennsylvania's gambling revenue surpassed $3.3 billion in FY2018/2019, marking a 1.84% increase from the previous fiscal year, driven primarily by slot machines and strategic legislative changes.
• Diverse Revenue Streams: The 2017 gaming expansion law introduced online casinos, sports betting, daily fantasy sports, and video gaming terminals, contributing over $45 million in FY2018/2019 and setting the stage for significant future growth.
• Future Projections: With the maturation of sports betting and online gambling, Pennsylvania's gambling revenue is projected to potentially reach $4 billion in FY2019/2020, highlighting the state's dynamic and expanding market.

Record-Breaking Revenue

In the fiscal year spanning July 1, 2018, to June 30, 2019, Pennsylvania's gambling revenue hit a new record, surpassing $3.3 billion. This represents a 1.84% increase from the previous fiscal year. Slot machines, a significant contributor to this revenue, saw a 1.1% increase despite a 3.4% reduction in the number of available machines.

Valley Forge Casino Resort, in particular, experienced a nearly 12% rise in slot revenue, the highest among the state's casinos. This growth is largely attributed to the 2017 gaming expansion law, which removed restrictive fees and allowed for an increase in the number of slot machines and table games.

The performance of slot machines in Pennsylvania highlights a fascinating aspect of the state's gambling market. The overall rise in slot revenue despite a decrease in the number of machines suggests improved efficiency and perhaps higher spending per machine. This trend underscores the state's ability to adapt to changing market conditions and maximize revenue from available resources. On an individual operator level, results varied, reflecting the diverse strategies employed by different casinos to attract and retain customers.

Table Games Performance

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PA Online Casinos

PA Sports Betting

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PA Online Poker

PA Land Casinos

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All Casinos

While slots saw an uptick, table game revenue dipped slightly by just over 1%. Six casinos reported increases, with Rivers Casino leading at a 9.31% increase, while six others saw declines, with Lady Luck Casino Nemacolin experiencing the steepest drop at 30.59%. This mixed performance in table games indicates a more volatile segment of the market, where consumer preferences and competitive strategies play significant roles.

The performance of table games is crucial as they often attract a different clientele compared to slot machines, with a potential for higher spending per visit. The slight decline in table game revenue could be an area for targeted marketing and promotional efforts to boost overall gaming revenue further.

Online Gambling and Sports Betting

The 2017 gaming expansion law also introduced new revenue streams such as online casinos, poker, sports betting, daily fantasy sports (DFS), and video gaming terminals (VGTs) at truck stops. During FY2018/2019, DFS and sports betting alone contributed over $45 million. With the full-year availability of sports betting and the introduction of online gambling in July 2019, significant revenue growth is expected.

Sports betting, both retail and online, is poised for substantial growth. The initial numbers, with retail launch in November 2018 and online launch in May 2019, indicate a strong market potential. As the market matures and more consumers become aware of these options, the revenue from sports betting is likely to see a dramatic increase. Online gambling, encompassing both casino games and poker, also holds significant promise for driving future growth.

Future Projections

The outlook for Pennsylvania's gambling market is promising. With sports betting and online gambling expected to mature, the FY2019/2020 revenue could potentially reach $4 billion. The state’s burgeoning online sector is anticipated to be a significant growth driver, with projected revenue of up to $500 million.

This projected growth is not only beneficial for the gambling industry but also for the state’s economy. The additional revenue can support public services, infrastructure projects, and other state-funded initiatives. Moreover, the success of Pennsylvania’s gambling market can serve as a model for other states considering similar expansions.

The success of Pennsylvania’s gambling industry has broader economic and social implications. Increased revenue from gambling supports numerous public initiatives, including education, infrastructure, and social services. Additionally, the industry creates jobs, from casino staff to technology support for online gambling platforms.

However, the growth of the gambling industry also requires careful regulation to address potential issues such as problem gambling and ensure fair play. Pennsylvania's regulatory framework will need to evolve to keep pace with industry changes and protect consumers effectively.

Conclusion

Pennsylvania's strategic expansion and diversification in gambling have positioned it as a formidable market. As the industry evolves with the introduction of online elements and new gaming options, the state's gambling revenue is poised for continued growth, potentially setting new records in the coming fiscal years. The state's approach serves as a blueprint for balancing economic benefits with regulatory oversight, ensuring that the growth of the gambling industry translates into broader societal gains.