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A new all-time record has been set for monthly online gambling revenue in the US.
Given the way online casino revenues have been skyrocketing, that in itself isn’t news. What is news, however, is which state did it: Pennsylvania.
New Jersey has traditionally been the front-runner for online gambling because it had a big head start. Its market opened in 2013 and has been growing more or less continuously since then. In the eight-plus years since then, it has beat its own previous record more months than not.
It was nearly six years before Pennsylvania became the second state with a New Jersey-style competitive, private sector online gambling market. West Virginia, Michigan and Connecticut have followed even more recently.
Given its larger population – roughly 13 million to New Jersey’s 9 million – it makes sense that Pennsylvania would win out in the long term. It had a slow start, though, and has taken its time about catching up.
By contrast, Michigan was a force right out of the gates when it launched last January. Its population of 10 million puts it closer in size to New Jersey, yet in recent months it has threatened to catch Pennsylvania.
In February, explosive growth for Michigan and a poor showing for New Jersey made it a close three-horse race. However, Michigan found itself backsliding in March, while Pennsylvania’s growth continued.
When the dust settled, New Jersey had beaten its own record (set in January) with a total of $140,655,053 in gross gaming revenue, but Pennsylvania had done better still with $142,748,422. It’s the first time any state has outdone the Atlantic City casinos and their online partners.
Despite their respective populations and other differences, the three major regulated online gambling states now split up the national market almost evenly.
In March, Pennsylvania online gambling operators saw their combined revenue increase over 15% from February, due in part to the longer month. Looking at the daily average to account for the extra three days, the increase was a still-respectable 4.2%. Much of the gains came from FanDuel Casino. It saw its daily average revenue increase over 15%, and topped $25 million in a month for the first time.
Year-over-year, the Keystone State is up 36.6%, which equates to a 2.6% compounded monthly average increase over the year. So, March was above average, and significantly so.
With the benefit of those gains, Pennsylvania accounts for 33.2% of the total, just a hair less than a full third. New Jersey isn’t far behind, at 32.8%. Michigan trails a little more, with 30.7%, while the smaller states make up the remaining percent-and-change.
Yet, despite growing their revenue in dollar terms, Pennsylvania and New Jersey have seen their share slip a little over the past year. That’s due in part to Michigan’s excellent performance. It’s also due to Connecticut’s launch, and West Virginia starting to find its stride. Though the latter is a tiny state, it has more than doubled its revenue and increased its share by half.
Though Pennsylvania stole the show in March, it doesn’t take anything away from the success story that is New Jersey online casinos. Even as the state approaches a decade of operations – the ten-year anniversary will be Nov. 21, 2023 – it is still showing annual growth in excess of 20%. For March, the exact annual growth figure is 23.7%.
That said, there are bumps in the road, and March was actually a slower month for NJ than February. It did set a state monthly record due to having those three extra days, but the daily average was down 2.3%.
Ocean Resort had a phenomenal run, doubling its monthly total and increasing its daily average 89%. The newcomer Bally’s was the other big winner, up 20%. Most other licenses experienced a slowdown. Of the big ones, Caesars had the worst of it, down nearly 11%.
On the other hand, it wasn’t a bad month for New Jersey online poker rooms, which saw their collective daily average revenue rise 2.6%. PokerStars led the way there, presumably due to NJSCOOP, which kicked off towards the end of the month.
What comes up must come down. Michigan made historic gains in February, but part of that was recovery from an unusually poor January. The flip side of that is that February was itself unusually good, so now we’re seeing a corresponding downward correction.
The good news is that the downturn wasn’t much worse than New Jersey’s. All told, Michigan online casinos and poker rooms saw a dip of 3.1% in their daily average revenue.
We see a similar pattern at the operator level. Front runner BetMGM Casino, which expanded its lead significantly in February, dropped 7.7% in March and saw its market share slide to 36%.
Barstool Casino had the best month in the state, up nearly 30%, and expanding its market share to an even 4.0%. PointsBet, BetRivers and FanDuel also had decent months, while the rest of the state’s operators either held about even or saw daily revenue drop.
The normally volatile Mountain State had a comparatively calm month. WV online casinos pulled in a bit over $9 million, and saw daily average revenue rise 1.7% from February.
The Mountaineer Casino license – the smallest of the three – had a great month, up over 42%. It hosts BetRivers and Caesars. The largest license, belonging to The Greenbrier, did okay, up 7.4%.
That means all the losses came from Hollywood Casino at Charles Town Races, where daily average revenue dropped over 18%. Though there are two casinos on that license, PointsBet is surely too small to account for such a big change. What this points to is a bad month for DraftKings Casino in WV.
Surface-level revenue numbers for Connecticut in March don’t paint a particularly interesting picture. Rather, promotional spending is the real story in the Nutmeg State.
There are only two online casinos in Connecticut: DraftKings and Mohegan Sun, the latter being powered by FanDuel. Since the state launched, DraftKings has been the leader, but it is spending intensely to hold that position and now losing ground despite that.
Daily average revenue for the state dropped 5.2%. For DraftKings, the loss was 10.3%. Mohegan Sun, on the other hand, rose 3.6%. DraftKings’ share of the market, which was trending up towards two-thirds, has now slipped back to around 60%.
More alarmingly, this is despite increased promotional spending by DraftKings. Except for a brief burst after launch, Mohegan Sun has been handing out a consistent $1 million or so in promotional credits each month. DraftKings, on the other hand, has gone from $2.5 million in January, to $17.2 million in February, and now $32.2 million in March.
For comparison, its total gross revenue for the month was just $13.7 million, so it spent more than twice what it earned. Worse, for tax purposes it can only deduct 25% of its gross revenue each month for promotions. Thus, it’s still paying tax on roughly $10 million in revenue, despite a net loss of $18.5 million on the month after promotions.
As of press time, Delaware has not reported its numbers for March. This article will be updated when those figures come in.
|State||Mar '22 iGaming GGR||Change (m/m)||Change (y/y)|
|West Virginia|| $9,152,619||+1.7%||+107%|