The betting sector in the US state of Pennsylvania passed a new milestone in October when the state became the third in the US to reach the half-billion-dollar handle for a single month of sports betting. The figure for October was an impressive $525.8 million during the month, representing a big 13.6% rise on the figure of $462.8 million for September.
September’s figure was itself a new record, but the state has smashed through that barrier as it continues to grow and ranks among the top sports betting regions in the country. In fact, only New Jersey and Nevada have passed the $500 million in a single mark previously.
The bumper month of the handle is also good news for Pennsylvania’s state funds. According to October’s figures, revenue from sports betting hit $47.8 million during the month, which is higher than the previous revenue top figure of $31.6 million, even allowing for $11.1 million worth of promotional credit. In total, the sports betting sector raised $13.2 million for state coffers during the month.
The majority of sports betting in Pennsylvania continues to come through mobile platforms. According to the figures for October, the share of sports betting in the state carried out through mobile betting apps was 89.8%, representing a slight rise from September’s 89.5%
Promotions Holding Steady
Promo credits have been an important part of the operating model for sports betting companies in a number of states, and that has certainly been the case in Pennsylvania. At first glance, October’s figures would suggest that promo credits have dwindled as a share of the overall sports betting revenue. The $11.1 million figure for promo credits works out at 26.6% of total revenue for the month, a significant drop from the 91.3% recorded in September.
But on closer examination, that sharp percentage drop is mainly due to a dramatic increase in total revenue. In fact, operators paid out $12 million in promo credits during the month of September, so the fall is not as significant as it first appears, and promo credits remain a significant factor.
Tax Implications
Promo credits will continue to play a significant role in the Pennsylvania betting sector for a number of factors, not least the fact that the percentage of promo credits an operator record has important tax implications. Operators in the state are permitted to deduct spending on promo credits before they calculate their revenue for tax purposes.
Another reason for the high usage of promo credits is the fierce competition for new customers, particularly during the fall, when the NFL season gets underway; a competition that has been increased with the arrival of Barstool Sportsbook during the month. In total, five sportsbooks offered over $1 million in promo credits during the month: BetRivers, Unibet, Barstool, DraftKings, and FanDuel, with the last-named giving away a total of $3.1 million in promo credits.
Barstool Gaining Ground
Barstool has made a big impact in its new market, although it remains the fourth biggest operator in the state, taking $63.8 million in bets in the month. FanDuel continues to lead the way, with an impressive $184.9 million in total handle, including $181 million through online betting. DraftKings was some way behind with $123.4 million in a handle, while BetRivers, which holds two sports betting licenses in the state, recorded $68.6 million. Bringing up the rear were Parx Sportsbook and Fox Bet, which registered $29.2 million and $29 million, respectively.
