Live! has increased its share of PA online gambling revenue from 0.7% to 2.6% in one year, while Parx has dropped from 6.7% to 3.2%

Competition Heats Up Among Pennsylvania’s Smaller Brands As Market Growth Slows

All three major iGaming markets in the US continue to look stable, now that January revenue numbers are in. The top-level numbers for the markets may not be hugely exciting, but there are some interesting things happening with the battle for market share, especially in Pennsylvania.

2020 and the first half of 2021 were a dramatic period for the economy in general, including online gambling. Over the last six months, however, New Jersey, Pennsylvania and Michigan have all started looking like they’re entering a period of relative normalcy. There will still be seasonal effects, and random month-to-month fluctuations, but the basic story for these states is now organic growth to the tune of a few percent per month.

We’ll take a closer look at these total market figures further down in the article. First, though, let’s dig into what’s happening with Pennsylvania’s smaller license holders.

2021: A good year for the smallest PA licenses

One thing that jumps out in Pennsylvania’s revenue data is that Live! Casino has been on a tear for a few months now. Its January revenue is up 45% from December, but it has also had double-digit growth for six of the last seven months. Its monthly revenue only exceeded $1 million for the first time last July. Now it sits at almost $3.5 million and shows no signs of slowing down.

It has presumably been helped by the launch of a second skin on its license – Betway Casino – in addition to its own PlayLive! brand. This recent success has moved it into seventh place (out of 10) in the market. That’s a big improvement over battling with TwinSpires (operating on the Presque Isle license) just not to be in last.

That said, TwinSpires has also been on the rise for the past year, though it hasn’t been as explosive as Live! in the last few months. In fact, the three licenses which filled the bottom slots on the list one year ago have all increased their market share substantially since then:

  • Caesars: From 1.7% (Jan 2021) to 3.0% (Jan 2022)
  • Live!: From 0.7% (Jan 2021) to 2.6% (Jan 2022)
  • Presque Isle: From 0.2% (Jan 2021) to 1.2% (Jan 2022)

Mid-tier sites feel the pressure

Of course, while a market can grow, share of a market is a zero sum game. Those three licenses have increased their share from a combined 2.6% to 6.8%, and that additional 4.2% hasn’t come from thin air.

The story has been quite the opposite for the licenses that once held the middle portion of the standings. Operators like PokerStars, Parx and Unibet had, for a time, seemed to form a stable second tier. They were too far behind the likes of FanDuel and BetRivers to challenge for a top three spot, yet comfortably ahead of the likes of PlayLive!

The latter part of that no longer seems to be true. Both Caesars and PlayLive! have overtaken Unibet, and look like they’re on course to surpass Parx this month. Even TwinSpires looks like it could become a challenger. Meanwhile, Wind Creek, another local operator that once held seventh place in the market, now looks like it will be relegated to dead last.

It’s remarkable just how much market share these mid-tier sites have lost, both to these smaller brands, and to the market leaders.

  • PokerStars (not shown in graph above): From 9.5% (Jan 2021) to 5.8% (Jan 2022)
  • Parx: From 6.7% (Jan 2021) to 3.2% (Jan 2022)
  • Unibet: From 3.5% (Jan 2021) to 1.8% (Jan 2022)
  • Wind Creek: From 2.4% (Jan 2021) to 1.1% (Jan 2022)

Together, this band of licenses has lost more than 10% in market share over the past year. A bit more than half of that went to the market leaders, and the rest to these smaller sites. For all but the top four licenses, Pennsylvania has become an extremely tightly contested market.

New Jersey online gambling revenue: Jan 2022

Getting back to the bigger picture, New Jersey had the best month among the larger states. NJ online casinos and poker rooms collectively pulled in nearly $138 million in January. That’s a 3.5% increase over December, and yet another state record.

Pennsylvania online casinos should eventually overtake the Garden State due to having access to a greater population. However, they lost a little ground in January, coming up just shy of $130 million, an increase of only 1.9% from December.

Here too, it has been smaller operators seeing the biggest gains. The Bally’s license (which still hosts only PointsBet Casino for now) more than tripled its revenue, and is catching up with Ocean. The latter, which is home to Parx and Tipico in addition to its own brand, gained 22% itself, while Hard Rock (including Unibet and Bet365) was up 33%.

All other licenses gained or lost only a few percent.

Michigan online gambling revenue: Jan 2022

Michigan experienced negative growth in January, the first such downturn since June. It was only the slightest of slips, however, with total revenue for Michigan online casinos and poker rooms dropping from $121.8 million to $121.2 million.

That’s probably nothing to be alarmed about, just random variance. Since the Michigan market launched, its trajectory, averaged out over a few months at a time, has followed New Jersey’s quite closely. Both have enjoyed an average monthly growth rate of 2.4% over the past year, yet comparing their numbers for any single month, the difference has often been larger than that. In all likelihood, Michigan was simply on the wrong end of that volatility in January, but will even out in months to come.

Compared to NJ and PA, Michigan’s operators saw less movement in their market share. Even Caesars, which had been on a hot streak since rebranding from William Hill, only increased its revenue by 10% in January, a substantial slowdown from its 68% increase in December.

West Virginia online gambling revenue: Jan 2022

The often-volatile West Virginia online casino market had a comparatively stable month, with total revenue dropping by 1.7%.

Mountaineer Casino bucked the overall market trend, increasing its revenue by nearly 10%, despite seeing wagering drop by over 14%. That’s because its January margin of 4.2% is unusually high for the market, which means we should probably expect to see its revenue come back down soon. The Mountaineer license hosts both Caesars Casino and BetRivers.

The other two license holders, Greenbrier and Charles Town, also saw their margins increase, albeit by smaller amounts. Even so, each saw a decrease in revenue of more than 3%, due to a substantial drop in wagering.

Connecticut online gambling revenue: Jan 2022

Connecticut’s two online casinos – DraftKings and Mohegan Sun (powered by FanDuel) – pulled in a combined $22.5 million in January, up about 10% from December. The improvement came in the form of a better margin, as wagering was down slightly.

DraftKings is currently winning the market share battle in the duopoly. It took in 61.0% of the gross revenue (before promotional deductions) in January, up from 59.4% the month prior.

Delaware online gambling revenue: Jan 2022

Delaware’s performance in January was similar to New Jersey’s. Its 3.1% increase in revenue has kept it safely in seven-figure territory, with a total of $1,121,345 for the month.

That isn’t quite a state record, however. The high water mark for Delaware is still way back in May 2020, when retail casinos were closed due to the pandemic. However, that total was only $1,134,900. One more month of even very modest growth will put the Blue Hen State into record-setting territory.

State-by-state monthly revenue and growth rates

Here’s how all those top-level numbers look when you line them up against one another.

StateJan '22 iGaming GGRChange (m/m)Change (y/y)
New Jersey$137,849,716+3.5%+32.8%
Pennsylvania$129,993,034+1.9%+42.5%
Michigan$121,243,501-0.5%+33.2%*
West Virginia $7,584,396
-1.7%+149%
Delaware$1,121,345+3.1%+51.8%

All data comes from the state regulators, but there are some important things to note:

  • Pennsylvania doesn’t report unadjusted revenue for table games and poker. Revenue for those verticals has therefore had promotional expenses deducted.
  • West Virginia reports revenue weekly, not monthly. The monthly totals are therefore OPR’s estimates based on those weekly figures.
  • All changes are based on daily averages. January and December both have 31 days so this is irrelevant for monthly growth, but the Michigan annual change is calculated using 10 days for January 2021, as the market only opened on Jan 22 last year.
- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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