The revenue figures for Pennsylvania’s gaming market in December show where some sportsbooks could improve through iGaming.
The Pennsylvania Gaming Control Board (PGCB) reported a significant drop in taxable sports betting revenue for December 2024, but the results also show the importance of iGaming’s future.
The PGCB report shows that taxable income from wagering reached $21.8m in December, marking a sharp 69.9% decrease compared to the $72.5m recorded in December 2023. This represents one of the steepest year-over-year declines in recent memory for the state’s sports betting market.
The state also experienced a substantial decline in month-on-month revenue, with December’s total representing a 71.6% drop from November’s $77.1m.
The decline reflects challenges faced by the industry as wagering activity and hold percentages failed to meet expectations during the holiday season amid a series of customer-friendly sports results.
The decline in revenue was also mirrored by a reduction in betting activity. December’s total betting handle — comprising retail and online wagers — stood at $893.3m, a 4.5% decrease from November’s $935.5m.
On a year-on-year basis, December 2024 saw a 3.5% decline compared to the $925.5m recorded in December 2023.
Flat or falling across the board
Across the state, sportsbook operators experienced significant revenue declines in December. Of the 17 active operators, only 10 reported year-over-year revenue increases, and none managed to improve their earnings compared to the previous month.
Valley Forge Casino Resort and FanDuel led the market with $14m in revenue, comprising $13.9m from online operations and $130,252 from retail. However, this represented a 61.7% drop from November’s $36.8m and a year-over-year 64% decrease from December 2023’s $39.1m.
Hollywood Casino at the Meadows, partnered with DraftKings, reported revenue of $7.2m, the second-highest in the state, with $7.1m from online betting and $92,031 from retail. This figure reflects a 65.4% decline from November’s $21m and a 62% drop compared to December 2023’s $19.2m.
Presque Isle Downs and Casino experienced the steepest revenue loss, reporting a deficit of $819,446 in December. Hollywood Casino at Penn National, at -$470,150, followed right behind.
Other venues, including Hollywood Casino at Morgantown, Rivers Casino Pittsburgh, and Live! Casino Pittsburgh, also recorded net losses during the month.
Time for a paradigm shift
Despite December’s poor performance, Pennsylvania remains a key player in the US sports betting market. It’s also important in the iGaming space, and some operators known for their sports betting success — like FanDuel — may need to change tactics in response.
While statewide online sports betting revenues dropped by approximately $50m, online gaming saw an increase of $59m — about $20m higher than anticipated trends.
This suggests that additional activity may have carried over into early January due to the timing of year-end outcomes. However, according to analysts at Regulus Partners, Pennsylvania players did not channel their sports betting winnings into FanDuel’s online casino.
Despite FanDuel’s broad customer base and significant share of the sports betting market, its online casino revenue remained relatively flat month-over-month, while the overall market grew by 12%.
This trend indicates that sports betting winnings earned on FanDuel were likely spent on competing online casinos, according to Regulus. While the broader market showed typical cross-product cycling, FanDuel underperformed in this area.
This dynamic also helps explain why December’s results were not as concerning for other US operators, as they capitalised on strong performance in online casinos. These operators benefitted from recycled winnings that did not need to be paid out in their less successful sportsbooks.
Regulus suggests that this is where FanDuel could develop its activity more. Strengthening its casino offerings to encourage greater player engagement may be crucial for maintaining and growing market share, especially as more states consider legalising online casino gaming.