FanDuel Casino drops back into third place in PA
Online Poker Report

Rivers, PokerStars Overtake FanDuel As Pennsylvania Online Gambling Blossoms

PA online gambling revenue

Online casinos and poker sites in Pennsylvania have another month of good growth behind them.

PA online gambling revenue reached a new record in March, as it has done every month since launch in 2019. Poker soared to its own new high, while the growth of other verticals seems to be reaching a plateau.

The slowdown largely comes from FanDuel Casino, which launched early this year in partnership with Valley Forge. It posted exceptional growth in February, its first full month of operation, but that honeymoon period now seems to be at an end. It was the only operator in the state to see its revenue fall in March.

Efforts to contain the spread of COVID-19 forced the shutdown of the state’s brick-and-mortar casinos mid-month, consequently bolstering online gambling revenue as housebound players look for distractions.

Online casino games and poker now generate over $24 million in monthly revenue for Pennsylvania, with over $8.5 million of that going to state and local taxes.

PA online gambling highlights – March 2020

The growth of PA online gambling in March was underpinned by a few key highlights and trends:

  • Total market revenue grew 24%, slower than the 40% rate in February.
  • Slots revenue grew 28%, while revenue from tables increased just 9%.
  • Online poker did the best of all — up 71% — though PokerStars remains the only game in town.
  • While slots play surged by 52%, margin declined from 3.8% to 3.2%.
  • FanDuel, despite looking like a dominant force in February, dropped to third place in total revenue behind Rivers and PokerStars.
  • Lifetime tax revenue from online casino/poker hit $33.6 million with an aggregate effective tax rate of 37%.

Although it looked in February as if the hierarchy of the top three operators was firmly established, that was not the case. BetRivers reclaimed the top spot in March, a position it hasn’t held since PokerStars PA launched last November. Stars now sits in second place in PA.

Parx and Hollywood remain in a virtual tie for fourth place behind FanDuel, with Parx continuing to hold a slight edge.

BetAmerica also managed to get itself better-established in March after a slow start. Although it’s still the smallest of the state’s seven operators, its table games are now generating significant revenue.

PA online gambling revenue breakdown

Total revenue: $24.27 million (+24% from February)

  • Slots: $12.35 million (+28%)
  • Table games: $8.78 million (+9%)
  • Poker: $3.13 million (+71%)

Total Taxes: $8.57 million (+27%)

FanDuel’s declining revenue has been the trend since its very first weeks of operation. Its February numbers made for a 20% drop in daily average revenue from its first eight days of operation at the end of January. The 18% dip in March is a continuation of that, though the rate of decline is slowing.

Almost all operators saw a big jump in slots activity partially counteracted by a drop in hold.

Unibet is the clearest example; its slots received almost twice as much play in March as in February, yet revenue increased only 15%. Rivers saw the biggest gains in slots play, with an increase of 75% in coin-in and 51% in revenue.

Looking at the total market, poker was the best-performing vertical with a gain of 72% — and PokerStars was the sole beneficiary of that. Its own casino and slots verticals actually did even better, though, with revenue from table games up 111% and slots up 96%.

PA online sports betting revenue

The above figures don’t include sports betting. While other forms of online gambling have benefited from casino closures, sports betting revenue took a significant tumble due to a lack of events to bet on after sports seasons were suspended midway through the month.

PA online sportsbooks took only $118 million in bets in March, down from $294 million in February. Retail sportsbooks closed at the same time as the casinos but took an additional $13 million in bets before they did. Total handle was down 60%, though that was offset by hold nearly doubling from 3.3% to 6.5%.

As a result, total PA sports betting revenue fell 25% to $8.6 million gross. Deducing $1.7 million in promotional credits, sportsbooks collectively made $6.9 million in net revenue. Online betting’s share of total action remained unchanged at 90% of bets, while its share of revenue actually declined slightly from 95% to 92%.

Read more about PA sports betting revenue at Legal Sports Report.

Who’s who in PA online gambling?

BetRivers/SugarHouse

SugarHouse Casino had the largest site in Pennsylvania in the market’s early days before the launch of PokerStars. It subsequently changed its name to Rivers Philadelphia and lost its pole position first to PokerStars (and later FanDuel). Now it has reclaimed the top spot as far as gross revenue is concerned.

The two Rivers sites saw their revenue growth accelerate from 34% in February to 42% in March. Slots grew somewhat faster than table games, and the share of revenue coming from the former increased from 66% to 71%.

An emphasis on slots means that Rivers pays a higher effective tax rate than some of its competitors. It gave back almost $3 million in tax on $6.9 million in gross revenue, leaving just $3.9 million in net revenue — less than PokerStars and only slightly more than FanDuel.

PokerStars (Mount Airy)

PokerStars quickly rocketed into the lead in Pennsylvania after its launch in November last year. Its initial momentum quickly petered out however and it fell to third last month following the launch of FanDuel.

As a well-known online brand, however, it has benefited to a greater degree than its competitors from the closure of the state’s live casinos. Poker traffic has nearly doubled, and revenue from that vertical is up 72%. Its other verticals have fared even better, with combined casino and slots revenue roughly doubling in March.

Though behind Rivers in terms of gross revenue, PokerStars leads the state for after-tax net revenue by a significant margin. Its emphasis on lower-taxed verticals meant PokerStars was able to hang on to $4.5 million of its $6 million in revenue while paying $1.5 million to state and local governments.

FanDuel Casino (Valley Forge)

FanDuel launched with great fanfare in late January and quickly claimed the top spot. It hasn’t managed to maintain the same level of activity it enjoyed in those early weeks, however.

One thing that may account for FanDuel’s falling numbers is its lack of browser support. Its casino is mobile-only. With people now stuck at home, it’s likely that more people are choosing to play in browser on their desktop computers than before. FanDuel might be receiving fewer new signups than its competitors as a result.

Slots did increased activity in March, but FanDuel paid out more in winnings so its gross slots revenue declined 21%. Table games were down 17% to create a total loss of 19% in gross revenue.

FanDuel’s product balance is weighted heavily towards table games, with slots contributing only 20% of its gross revenue in March. As a result, it paid less than $1.2 million in taxes on almost $5 million in gross revenue, keeping $3.8 million. That’s nearly as much as Rivers despite it making 36% more before tax.

Parx

Parx maintained its relative position in the market in March, staying just ahead of Hollywood in gross revenue.

Slots activity jumped 52% from February, but much of that additional money was returned to players. Revenue from slots increased only 17%. The story was similar but less dramatic with its table games, with bets increasing 22% but revenue only 13%.

Parx made $2.7 million in gross revenue in March and paid almost half of that in taxes due to its slots-heavy revenue distribution. It kept just under $1.5 million in net revenue.

Hollywood

Hollywood’s revenue growth was similar to that of Parx, with slots increasing 13% and table games 19%. It too saw a drop in its margin for slots but an increase for table games.

It remains the most slots-heavy of all operators in the state, with that vertical contributing 93% of its gross revenue. Because slots are taxed at an eye-watering 54% in Pennsylvania, Hollywood pocketed only half of its $2.6 million gross revenue. It paid out $1.3 million to the state, county, and local grants.

Unibet (Mohegan Sun)

Unibet saw betting increase but margins fall to an even greater degree than other operators in March. Bets placed increased 92% at its slots and 45% at its table games, yet revenues rose only 15% and 5% respectively.

It remains considerably smaller than all other sites except BetAmerica, and the latter is catching up. Unibet made $803,000 in gross revenue in March, paid $325,000 in taxes, and held onto $478,000.

BetAmerica (Presque Isle Downs)

BetAmerica launched in late January, days after FanDuel. It got off to a slow start due in part to being a less-established brand, but also because its focus is on sports betting. While it offers slots and casino games, these aren’t its primary business.

Although it was active throughout February, March was the first month in which BetAmerica settled into what looks like normal operations. Its table games, formerly not a contributing source of revenue, now account for 80% of its total.

Gross revenue rose from $67,575 to $425,878, establishing it as a significant competitor to Unibet and not simply a rounding error in the market.

Alex Weldon
- Alex is a freelance writer and artist living in Dartmouth, Nova Scotia. He has been doing data-based analysis of the online gaming industry since 2016.
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