Pennsylvania Sportsbooks Rebound With March Madness, Earn Record Revenues

• Sportsbooks in PA had a rough Super Bowl but rebounded in March on strong basketball numbers.
• In March, area sportsbooks saw $44.5 million in wagers and held $5.5 million for a 12.4% take.
• Online sports betting will cause state and sportsbook revenues to skyrocket.

HARRISBURG, Pa. – After taking a bath on the Super Bowl as reflected in Pennsylvania’s February revenue figures, area sportsbooks fittingly rebounded on the strength of a strong March Madness handle and hold.

Pennsylvania’s eight operational sportsbooks collectively cleared $5.5 million on a total handle of $44.5 million. Last month, Pennsylvania books earned $1.9 million on $31.5 million in wagers.

This means that in March, Pennsylvania sportsbooks held 12.4 percent of all wagers placed, which is considered to be unsustainably high. Indeed, in terms of hold, February wasn’t actually an outright disaster for the industry, as books held a respectable six percent.

Most books are satisfied with a hold (or “vigorish”) of between 6 percent and 8 percent. Typically, if a sportsbook can average these figures over the course of its fiscal year, it is considered to be a successful business.

So far, Pennsylvania sportsbooks have appeared to be quite successful, at least on aggregate. (For a full breakdown of monthly earnings per sportsbook, please visit the Pennsylvania Gaming Control Board here.)

All this translates into decent money for the state government, as well, though it might not have the impact that many expect. At least, not yet.

Pennsylvania has the highest sports betting revenue tax rate in the nation at 36 percent. Given the above numbers, this means that the state took in $684,000 in February, followed by a much better $1.98 million in March.

Fiscal year-to-date, Pennsylvania sportsbooks have taken in $125,627,832 million and kept $12,589,960, for a hold of just over 10 percent.

Of this, the state government has received $4,532,385 in taxes.

While that figure seems pretty scanty for a state the size of Pennsylvania and its $80 billion budget, it does not include online wagering, which is set to launch statewide by mid-year.

In states that offer remote online sports wagering (i.e. statewide betting rather than wagering limited to a given venue’s physical property), fully 80 percent of a book’s action takes place via the Internet.

Naturally, online wagering will cannibalize some physical sports wagering traffic at area books. Nevertheless, the majority of mobile wagers will be from new customers that are not able to wager on-site due to geographic or logistical constraints.

As such, online betting will substantially add to the state’s coffers, especially if Pennsylvania books can continue to earn at their current 10 percent clip.

There are also four more casino venues that have applied for and are awaiting their own licenses to offer land-based and online sports betting. When all of Pennsylvania’s eligible gambling facilities have legal sports betting up and running, sportsbook and state revenues will increase further still.

According to a 2017 study by the GMA, a mature Pennsylvania sports wagering market should be established by 2023 and generate $335 million in book revenue on just north of $5 billion in annual handle.

This would translate to $120.6 million in taxes for the state.

News tags: PA revenue | Pennsylvania | Pennsylvania sports betting