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    • Pennsylvania Crushes Records With $5.2B Gambling Revenue in 2022

    Pennsylvania Crushes Records With $5.2B Gambling Revenue in 2022

    By Jeff Osienya Feb 06, 2023 Industry
    Pennsylvania Crushes Records With $5.2B Gambling Revenue in 2022
    PA posts a historic $5.2 billion win in 2022 to jump to the second position nationally in the gambling scene by revenue. New Jersey has now slipped to the third position with this unforeseen defeat. Here’s a closer look at the numbers.

    Pennsylvania is now the second-highest earner in revenue after posting a new annual record in gambling revenue, narrowly edging out Nevada by about $28,735. The Pennsylvania Gaming Control Board (PGCB) recently reported that gambling activity in the state generated an income of $5.21 billion, a significant increase from the $4.73 billion collected in 2021.

    This stellar performance is partly thanks to the legalization of various facets of online gambling, sports betting, Video Gaming Terminals (VGTs), and fantasy sports contests. It all started with the Expansion Gaming Act in 2017, which marked the beginning of a record-breaking industry and was further boosted by the 2018 PASPA repeal.

    Overall, 2022 gaming numbers brought in a revenue of $2.12 billion for state coffers, recording a 9.8% rise from 2021’s $1.93 billion. Because of PA’s relatively high tax rates on gaming operators, Pennsylvania generates the most gambling tax revenue nationwide. For instance, online slot machines incur 54% taxation, whereas the tax rate for online table games and poker stands at 16%.

    iGaming and Sports Betting Garnering a Huge Fan Base

    Unsurprisingly, slot machines were the highest earners, collecting $2.4 billion in wagers, a showing that’s 4.51% higher than the previous year. iGaming, on the other hand, saw the highest year-on-year climb with 22.6% more income from 2021 after bringing in revenue of about $1.4 billion. Further, according to the PGCB, sports betting has been on an upward curve since being legalized in 2018. Following a $401.2 million win in 2022, proceeds from the sports betting vertical recorded a 17.96% jump year over year.

    It’s worth noting that iGaming and sports wagering are the only gaming categories that did not see a decline even with the pandemic in 2020. The dynamic duo has been gaining popularity over the past few years, and players have continuously shown a preference for internet-based gambling. As such, there is reason to believe that iGaming and sports wagering will keep the income stream flowing. On that note, the PGCB spokesperson Doug Harbach even explained the significant improvement in the iGaming sector, saying:

    Quote

    “Gambling on iGaming sites is getting more popular as players get more comfortable with online wagering and its integrity, along with more site option choices and the increases of games within the sites.”

    Other verticals that saw a year-over-year rise in revenue include table games which brought in $990 million, marking a 7.1% increase, and VGTs, with a 5.6% increase after registering a $42 million haul in 2022.

    Back to sports betting, the vertical has been a subject of debate in state assemblies around the US, especially after Covid-19. So, having already legalized sports wagering beforehand, the Coal State has been reaping the rewards and welcoming both domestic and foreign bettors to participate in its market. For instance, PA saw a $7.25 billion sports wagering handle in 2022, a 10.7% rise from the $6.55 billion registered in 2021.

    On the other side of the coin, fantasy sports contests were the only category that saw a year-over-year decline in gaming revenue. At $22.3 million, the state reported a 23.9% fall in fantasy sports revenue compared to 2021. In that regard, Harbach added:

    Quote

    “I would guess that with the rising popularity of sports wagering, individuals are choosing to use their available dollars in that endeavor rather than in fantasy sports contests.”

    An Ever-expanding Gambling Market Recovering From the Pandemic

    By 2020, Pennsylvania had recorded the highest gambling revenues for consecutive years. But then, all that seemed to have been halted when the Coronavirus hit, and physical casinos had to shut down operations for about 2 months. The result was a drop in the annual income, but the Keystone state has surprised gaming observers as it has been one of the first to record a steady recovery from the devastating effects of the virus.

    As economies across the nation continue to recover from the pandemic, Pennsylvania seems poised for another successful run with operators intent on expanding their businesses by opening new establishments.

    An excellent example is Greenwood Gaming and Entertainment’s Parx Casino Shippensburg, which just opened in Cumberland County. As a Type 4 category casino, Parx Casino accommodates a sports bar, a 100-seat restaurant, 500 slot machines, and 48 electronic table games under its roof. The Hollywood Casino York and Hollywood Casino Morgantown casinos are also relatively new to Pennsylvania but have already proved promising with their contribution to the 2022 numbers.

    The already-established casinos have also been renovating existing gambling venues to create an appeal to younger players. Major casinos in the Penn area have invested a total of $250 million in in-house improvements over the pandemic period. These include adding new retail sportsbooks, restaurants, and hotels, which have all been designed to increase foot traffic to the respective gaming venues.

    After their incomes took a nosedive when the pandemic struck, casino owners had to think of ways to adapt to the new normal and still break even. The results have been evident for some operators like Parx Casino, Valley Forge Casino, and Mohegan Pennsylvania have since reported a full recovery from the pandemic.

    A Force to be Reckoned With in the Gaming Scene

    Gambling revenue has become a fundamental part of the overall income for most states. As legislators in some states deliberate on legalizing one or more gambling categories, more than 30 are already leveraging the gambling market to rake in more revenue. Gaming expansion across different states has thus played a significant role in the post-Covid recovery phase as more money has streamed in than ever before. Several states have even been breaking earnings records on consecutive occasions, including New York, whose mobile betting sector just turned a year old.

    Pennsylvania is known for various achievements, including its reputation as an industrial center whose economic backbone comprises the real estate, healthcare, and manufacturing sectors. However, with the latest report from the gambling scene, its list of accomplishments has grown as it now boasts of being second place in the country’s legalized gambling revenue.

    Meanwhile, applications for new gambling licenses have been open since January 3, and operators will no doubt be clamoring for a piece of the promising cake before the March 3 deadline. The online gaming licenses are categorized into three, and a single operator can win gambling certificates from one or more of the three. In addition, casino owners can operate independently of a physical location inside the state if running online gaming operations. These are some of the provisions contributing to the steady gambling income PA continues to enjoy.


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