Pennsylvania’s Gambling Expansion Achieves $400 Million for the State
Pennsylvania was the latest US state to join in on the gambling expansion agenda in the United States. The gambling expansion package made its way to legislation back in 2017, which paved the road for daily fantasy sports, sports betting, online gambling and lottery online sales. All of this nearly resulted in $400 million for the US state. The legislation passed in October of 2017, after Tom Wolf, Pennsylvania’s governor signed on the package. So it has been almost 400 days, which means that this legislation had a turn-around of nearly one million US dollars per day.
Market Analysis Breaks it Down in Numbers
PlayUsa analyzed the Pennsylvania market, using numbers and official statistics for the fees of license applications and estimated figures based on virtual spots, keno and online lottery sales. The analysis collected almost $23 million from lottery sales online, which became active in June of 2018. It included $19.6 million from draw-based online games, $3.6 million from Keno and a total of $87000 from the virtual sports category. These numbers show that most of the money came from the license fees.
The licensing fees included $128 million from satellite casino licensing auctions, with $94m from the interactive gaming fees. It is surprising since the PGCB (Pennsylvania Gaming Control Board), did not set a specific date to the launch of the interactive gaming category.
Besides that, $78 million came from casino licensing fees and $60m from the licensing application for sports-betting. Last and least, $1.4 came from the taxes by the daily fantasy sports firms following the operation of the market in May of 2018. These numbers came as a tremendous complement to the $799.8m that occurred in the form of taxes from the slot machines’ operation for the 2017-2018 financial year. All in all, market analysts expect that the market would produce more than $34 billion in taxes for the Pennsylvania General Fund for the 2018-2019 financial year, which is a direct result of the expansion of gambling and online gambling in the US state.
Present Success – But Future is Uncertain
Commenting on the analysis, PlayUSA Analyst Jessica Welman stated that if the point of this expansion was to quickly fill the short-term gaps in the budget of the state, then the development is undoubtedly a success so far. She also added that they believe that the expansion is going to be a winner for the budget, but on the other hand, the long-term picture is not as sure.
Welman stated that the reason behind that uncertainty is the high taxes and the massive licensing fees, which might limit the market growth, and in turn, the revenues for the state. It can only be evident when more sportsbook launch, and with the start of the iGaming section. Up to this date, only the William Hill sportsbook has gone live, at the Hollywood Casino in Penn National. Other venues in the state, in Philadelphia will soon follow by the end of 2018 such as SugarHouse and Parx Casino. The rolling out of iGaming and internet sports-betting is not going to happen until the first few months of 2019, and it would be around the same time of the launching of satellite casinos, which is one of the significant features in the gambling expansion bill.