PGCB Annual Report: Years After COVID Closures, Online Casinos Still Outpace Retail
The closure of retail casinos during the early waves of COVID-19 brought unprecedented numbers of players to online casinos, but this year’s annual report from the Pennsylvania Gaming Control Board shows that growth hasn’t slowed all that much in the years since. Regulated gambling in the state generated over $5.5 billion in gross revenue in the fiscal year ending June 30, up 9.34% from the previous year and resulting in $2.36 billion in tax revenue. One of the biggest reasons for the successful year is the iGaming sector. Pennsylvania’s legal online casinos generated just over $1.5 billion in taxable revenue, an increase of 24% year-over-year.
Retail casinos also saw a record year with revenue of $3.4 billion. Slot machines saw a 1.74% increase, though table games brought in 4.11% less revenue. While retail casinos have bounced back from COVID-19 shutdowns and restrictions, people are not rushing back as much as some might expect. That’s because online casinos continue to improve their game selection, technology, and overall experience, giving players more reasons to play online.
Online Casinos Have Seen Steady Post-COVID Growth
Online casinos in Pennsylvania launched in July 2019. In its first year, iGaming brought in $39.29 million, most of which came in the last two months. Then came the COVID-19 pandemic, which gave iGaming a huge boost.
In Feb. 2020, monthly revenue was just under $22 million. But after shutdowns, that number jumped to over $55 million in April and over $60 million each of the following months. Revenue has been growing since at a steady pace.
By March 2021, monthly revenue reached $100 million and never fell below that. Even as restrictions were lifted, iGaming revenue kept climbing. While many online services and businesses saw a sharp decline in revenue because the public wanted to partake in outdoor activities, online casinos kept witnessing an increase in revenue.
By Oct. 2022, iGaming monthly revenue reached the $150 million mark. For the 2022 calendar year, Pennsylvania’s online casinos earned $1.67 billion.
Bonus News Managing Editor Alex Weldon projected coming into the year that the 2023 calendar year total would surpass $2 billion. With the PGCB now having reported numbers through September, it looks like the state will pass that milestone comfortably. The total for the first three quarters is more than $1.5 billion, and Q4 is likely to exceed $550 million this year.
(Note: Revenue numbers in this section are larger than those reported by the PGCB because they represent an estimate of gross gaming revenue (GGR) before promotional tax deductions. The PGCB reports adjusted revenue, but Bonus uses GGR because it allows a fair comparison with other states, most of which report GGR. The PGCB’s fiscal year also runs from July 1 to June 30, while Bonus uses calendar years.)
Online Slots and Table Games Post Strong Results
The highlight of iGaming revenue was real money slots. Slots saw a 26.5% increase year-over-year and surpassed $1 billion in revenue for the first time. Table games also saw a double-digit increase. Meanwhile, online poker posted a negative result, but that’s not surprising, given the decreased interest in online poker. The $1.53 billion iGaming revenue breaks down as follows:
- Slots: $1.07 billion, up by 26.5%
- Table games: $428 million, up by 22.6%
- Poker: $32 million, down by 9.4%
Slots surpassing the one billion mark is not surprising. Pennsylvania casinos offer over 8,000 slot games, and the number keeps climbing. The thousands of titles include adaptations of some of the most popular slots in retail casinos.
One of the most famous slots, Buffalo, recently debuted at online casinos. Other popular titles like Miss Kitty and Timberwolf are also making their way to online casinos. Retail favorites like variations of Willy Wonka and Wizard of Oz will also get digital versions in the near future.
The Popularity of Live Dealer Games Is Growing
One reason for the declining table game revenue in retail casinos could be the growing popularity of live dealer table games at online casinos. According to the PGCB, live dealer table games account for over 50% of online table games’ total revenue. According to the annual report, at the end of the fiscal year (June 30), 19 online casinos offered 75 live dealer table games.
Evolution Gaming, the sole studio in the state, offers all games. But that could change in the current fiscal year. Light & Wonder’s subsidiary for live dealer games, Authentic Gaming, recently made its US debut in Michigan. Positive results from Michigan could result in Authentic looking into a studio in Pennsylvania.
Meanwhile, another gaming giant, Playtech, expects to launch live games in the state later this year. Playtech Live CEO Edo Haitin told Bonus that a Pennsylvania live studio is under construction. A Playtech launch could mean a different type of live dealer games – game shows, such as Adventures Beyond Wonderland.
Another live dealer company, StakeLogic, will debut in the US next year. Bally’s selected StakeLogic as a partner in the upcoming Rhode Island launch. StakeLogic might look into other states, including Pennsylvania, depending on how the Rhode Island rollout goes. But that will likely be in a future fiscal year.
PSU Report Helps Explain Pennsylvania Gambling
A report from Pennsylvania State University (PSU) provides information on the gambling picture in the state and helps explain the continued growth of iGaming. According to the report, the average online gambler in Pennsylvania plays for enjoyment. Other common reasons to play online include:
- The convenience of play
- Ease of availability
- Self-paced play
- Flexibility in stake
The report shows that players seek a more flexible means to gamble. And while retail casinos generated higher revenue, a few other statistics from PSU’s report show that online casinos could close the gap in the future.
According to the report, online gamblers in Pennsylvania are much younger, averaging 38.8 years old. Those who frequent retail casinos are significantly older, 48.8 years old on average. Online players also tend to be more educated, and more report being employed. As younger generations lean toward digital services, iGaming will likely catch up to retail casinos in the future.
Increased Competition Is Helping iGaming
The success of online casinos is attracting more US and European game developers to Pennsylvania and other iGaming states. That has resulted in a competitive market with a large number of slots and other games. But the number of games is only one of the reasons for the continued growth of iGaming in Pennsylvania.
In addition to adding more games, many operators have launched new casinos, rebranded current ones, or introduced new technology. This year alone, there has been a lot of movement, including:
- Caesars Casino rebranding to Tropicana Casino
- New launches: Bally Casino | Golden Nugget Casino | Caesars Palace Casino
Additional rebrands are in the process or expected. Fanatics acquired Pointsbet earlier this year, and the Pointsbet app now features a “PointsBet, a Fanatics Experience” name. Expectations are for Pointsbet to rebrand to Fanatics. Additionally, Penn Entertainment recently acquired Barstool Casino & Sportsbook. While the company’s Hollywood Casino is live in the state, Penn’s branding deal with ESPN for the sportsbook could bring many new users to the company’s online casino.
Unibet, one of the smaller operators, introduced a new platform in July and hopes to increase its presence in the state.
The post PGCB Annual Report: Years After COVID Closures, Online Casinos Still Outpace Retail appeared first on Bonus.com.