Pennsylvania sportsbooks had a February of mixed emotions, enjoying a significant surge in volume while also enduring a sharp decline in revenue.
Operators in the commonwealth combined to generate $757 million in handle for the month, up 14% year over year to reach a new February record. Gross revenue tumbled 33% to just $34.0 million, though, the market’s lowest output in 18 months. Effects on net revenue were further magnified by a 30%+ increase in promo spend.
That 4.5% hold marks the leanest month for local operators since February 2022.
Eagles’ Super Bowl win shreds margins
February’s decline is quite localized and largely traces back to the results of Super Bowl 59. The outcome — a dominating Eagles’ win — heavily favored local bettors, of course.
Brick-and-mortar sportsbooks found themselves especially exposed on Super Bowl Sunday, losing a combined $2.89 million on $30.2 million in wagers for the month. Twelve of the state’s 17 retail locations finished February in the red, including Parx with a loss of more than $800,000.
These results serve to underscore the volatility of sports betting as a business, particularly when the outcome of a major event aligns with public preference. And it’s not great for the state, either. Tax revenue for the month came to just $2.69 million, the lowest contribution from the local industry in three years.
Fanatics shaves away at leading duo
The balance of power among Pennsylvania online sportsbooks has been fairly well established for a long time now, with FanDuel leading DraftKings and the two together accounting for around 70% of statewide betting volume. For February, however, that number was closer to 60%.
Fanatics really leapt off the page, surging into third place with a handle share of 13% — doubling its number from January to a new personal best. Most of its flash growth, it should be said, appears to stem from an especially aggressive promotional strategy. Fanatics gave away more money ($4.32 million) than it won ($3.90 million) in February, producing an overall net loss of more than $400,000.
That’s still better than some of the competition. BetMGM not only surrendered its third-place spot, it also gave nearly $900,000 back to local bettors on $58.3 million in handle. Factoring in an additional $2.18 million in promo spend, BetMGM’s net loss for the month in Pennsylvania ballooned past $3 million.
ESPN Bet, meanwhile, mustered less than 4% of local handle and 3% of revenue, halving its share over the past year to fall back into sixth place behind bet365. It, too, gave away more money to customers than it won.
National picture shaping up strong
Reports for February are still trickling in from a number of markets, but Pennsylvania’s month looks especially rough in partial context.
New Jersey sportsbooks won $72.7 million on $950 million in handle, holding 7.7% while serving a similar base of passionate Philadelphia fans. New York sportsbooks held 9.3% to win $185 million, and even comparatively small markets like Tennessee and Kansas generated more revenue than Pennsylvania did.
Across the 20 markets that have published their revenue numbers so far, combined hold for February stands at a respectable 9.6% — up substantially from 7.9% a year ago. Only Delaware has so far reported tighter margins for the month (4.0%) than Pennsylvania.
Quick notes from PA online casinos
Pennsylvania’s online casinos, meanwhile, continue to hum along at record levels.
February’s $262 million in iGaming revenue was down marginally from January but still enough for a per-day record given the shortened month. Online gamblers in the state lost a combined $9.34 million per day in February.
The first $300 million month figures to be on the horizon for operators. The current record is $281 million from this past December.
Regulators in Pennsylvania don’t provide brand-level data for online casinos, but the group that operates under the Hollywood Penn National license continues to set the pace. Hollywood, DraftKings, BetMGM, and Fanatics combined to generate $95.2 million in iGaming revenue, more than a third of the market’s total.
The value of a well-regulated online casino industry becomes even more obvious in months like February, where the more consistent (and far more substantial) revenue stream can help mitigate the seasonality and volatility of sports betting.
