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The three main online gambling states – NJ, PA and MI – now routinely see monthly online gambling revenue in excess of $100 million. It doesn’t take a math degree to work out that this means $1 billion is an easy annual target for each state to hit.
The question then is who’s first across that line. This year, New Jersey and Pennsylvania both did so in October, which was otherwise an uneventful month. Though we don’t have day-to-day revenue breakdowns, it’s safe to say New Jersey passed the milestone earlier in the month. Counting online poker as well as casino, it was a mere $11 million shy on Sep. 30, so probably hit the ten-digit milestone on Oct. 3 or maybe 4. Pennsylvania only cleared the bar by $50 million, so probably did so in the final week of the month.
And what about Michigan? It’s at an unfair disadvantage this year, having only launched its online casino market on Jan. 22. It sits at just shy of $775 million as of Oct. 31. It would need an exceptional run in November to hit $1 billion by the end of the month, but should get there within the first half of December.
All of these states are looking to finish the year on a strong note. Online gambling revenue surged in September. All three states held on to those gains in October, though they didn’t add much to it. As for the smaller iGaming states, Delaware bounced back after weak numbers in September, with daily average revenue up 13% in October, and West Virginia did better still, up 32%.
As always, data for this article comes directly from each state’s respective regulatory body.
Looking at how the race to $1 billion has played out for the big three states, what stands out is both their individual consistency, and the similarity between the three. 2020 was a chaotic year due to COVID, plus Pennsylvania was still getting up to speed and Michigan hadn’t launched yet.
In 2021 however, things have been mostly smooth sailing in the online sector, and the Pennsylvania market seems to have reached maturity. Meanwhile, the delays in Michigan’s launch proved worthwhile, as that state hit the ground running. Within the first quarter, it was already showing stability and growth comparable to the other two, though it took until September to cross the $100 million monthly revenue mark.
Michigan’s year-to-date total lags behind the others because it missed the first three weeks of the year. Its monthly numbers still trail the others slightly, but are catching up. If current trends continue into 2022, however, all three states will be within about 10% of one another in terms of monthly revenue, while month-to-month volatility will usually be on the order of a few percent.
That doesn’t account for population, however. In per capita terms, New Jersey is still king, since it manages the same performance with a population of just 9 million or so, compared to 10 million for Michigan and 13 million for Pennsylvania. On the other hand, it has had many more years to grow, having launched way back in 2013. One interesting thing to watch for in the long term is whether or not the three states ultimately trend towards revenues that are proportional to their respective populations.
There is one other elephant in the room, which is tax revenue. Though the states are very similar in gross gaming revenue, Pennsylvania is reaping greater direct financial benefits than the other two combined. That’s thanks largely to its eye-watering 54% tax rate on slots, which many worried would chill the market. So far, at least, it looks as if that trade-off has been worth it.
True, on a per capita basis, Pennsylvania’s GGR has been only two-thirds of New Jersey’s this year. On the other hand, its per capita tax revenue has been 60% higher. That’s something other states looking to legalize online casinos may take note of, to the industry’s dismay.
New Jersey online casinos brought in $124,569,344 in October, a state record. Online poker contributed a further $2,432,361. Combined revenue for the two was up 3.6% from September, but that’s due almost entirely to the extra day.
On a daily average basis, the increase from September to October was just 0.25%, an insignificant change.
Golden Nugget, the former market leader, also had a good month, up 7.5%. Though it’s too early to say it’s making a play to reclaim its title from Borgata, it certainly closed some distance. Borgata, down 1.7% in October, still holds a lead of about 20%.
Caesars and Bally’s took the worst of it, down 15% and 23% respectively. It’s early days for the Bally’s, however, which still has only one skin active – PointsBet – with at least two more waiting to launch.
Pennsylvania online casinos managed $114,185,126 in October, also a record. Poker added another $2,854,323, continuing September’s downward trend for that vertical.
Calculated as a daily average, combined revenue rose 1.2%. That follows a 12% leap in September, however, so simply hanging on to those double digit gains is a win. Table games accounted for the entirety of the October increase, while slots revenue slid slightly.
Of the bigger licenses, Valley Forge was the big winner, up over 13%. That’s all due to FanDuel Casino and its sister brand Stardust Casino. The Penn National license (home to DraftKings, BetMGM and Hollywood) held steady, while Rivers dropped slightly.
Many of the smaller brands had a good month, including PlayLive (+16%), TwinSpires (+9.5%) and Parx (+7.4%).
The Michigan Gaming Control Board doesn’t provide separate numbers by vertical, but Michigan online casinos and poker rooms collectively earned $109,673,896 in October, setting a record for a third consecutive month. As a daily average, that’s a 3.7% increase over September.
(Note: There is an error in the MGCB’s numbers, however. OPR does not have the correct number yet but will update when we do. In all likelihood, the state total is $2 million lower than it should be, and the actual monthly growth was 5.6%.)
Many individual operators did much better than the market as a whole. DraftKings had an exceptional month, up 23%, while Caesars gained 19%, Barstool 12% and FanDuel 11%. There was also PointsBet, which more than doubled its revenue, though it was one of the smallest operators to begin with.
Market leader BetMGM Casino slid a little, though only 1.4%, not enough to hold the market back on its own. A more significant factor was PokerStars/Fox Bet losing a whopping two-thirds of its revenue, down from nearly $3 million to less than $1 million. Update: Although MGCB told OPR that the number is correct, Fox Bet insists that it’s in error. We will update as we have more information.
Four Winds Casino and Wynn Bet also saw a significant decline in their revenue.
As mentioned, West Virginia online casinos had an exceptional month, with daily average revenue rising by nearly a third. WV reports revenue weekly, but our estimate for the monthly total in October is $7.1 million, up from $5.2 million in September.
The change is largely due to an improvement in margin by one or both of the skins on the Greenbrier license, i.e. BetMGM and FanDuel. Daily average wagers for these two increased only 7.3%, yet revenue surged over 70%, as the share held by the house rose from 2.1% to 3.3%. Both other licenses have a margin in the 3% to 4% range, so it was Greenbrier’s September margin that was unusually low and holding back revenue that month.
The Mountaineer license also had a great month, up 40%, thanks to the launch of Caesars Casino late in the month. That suggests that November revenue should be higher still. Of the three, the Charles Town license (home to DraftKings) was the only one to have a bad month, dropping 4.2% in daily average revenue.
Smaller markets tend to be more volatile than larger ones for statistical reasons, and Delaware typifies that. Daily average revenue for the market rose 13% in October, but that comes on the heels of a similar-sized drop from August to September. The market total was $930,093, slightly down from $945,512 in August and well below the all-time state record of $1,134,900, which came in May 2020 while retail gambling was on hold due to the pandemic.
Here are the states’ bottom line numbers in a single table.
|State||October '21 iGaming GGR||Change (m/m)||Change (y/y)|
Some things to note about the data: