The Pennsylvania Gaming Control Board (PGCB) recently announced that gaming revenue for September 2024 reached an impressive $505.9 million, marking a year-over-year growth of 6.17%. This increase was largely driven by significant gains in online gaming and sports betting. Let’s delve into the key details, highlighting which sectors performed the best and how brick-and-mortar casinos compared to online platforms.
Steady Growth in Online Gaming and Sports Betting
One of the biggest contributors to Pennsylvania’s gaming revenue growth came from the internet casino sector, with iGaming revenue reaching $176.7 million in September—a notable 10.79% increase compared to the same month in 2023. Despite this, there was a slight dip from the $183.7 million seen in August 2024, representing a 3.8% decrease.
Sports betting also saw significant growth, with revenue climbing by 46.13% to $53.5 million. This rise is attributed to the beginning of the football season, which always boosts betting activity. The total betting handle for sports wagering reached $811.3 million, an 11.71% increase over the previous year.
Record-Breaking Bonuses and Credits
The gaming sector also saw record-setting bonuses and credits, totaling $43 million. This contributed to adjusted gross revenue (AGR) of $53.5 million from a gross revenue of $95.8 million—a 46.1% increase year-over-year, making it the fifth-highest total on record.
The Impact of iGaming and Sportsbooks
Online casinos, led by Hollywood Casino, Valley Forge, and BetRivers, contributed significantly to the state’s revenue. Hollywood Casino, which operates DraftKings, BetMGM, and its internal app, reported $66.9 million in iGaming revenue, up 3.2% year-over-year. Meanwhile, Valley Forge Casino Resort, with its FanDuel sportsbook, saw a 33.03% year-over-year revenue increase, bringing in $47.1 million. BetRivers came in third, surpassing $30 million for the sixth time in seven months with $31.5 million in revenue.
Betting Handle and Sportsbook Performance
Valley Forge also led in sports betting revenue, generating $27.4 million from a betting handle of $320.4 million. Hollywood Casino at the Meadows followed with $13.1 million from $237.2 million in wagers. The Hollywood Casino Morgantown and Hollywood Casino at Penn National also posted solid sports betting numbers, with revenue of $2.5 million and $2.46 million, respectively.
Brick-and-Mortar Casinos: Mixed Results
While online gaming and sports betting saw impressive growth, Pennsylvania’s brick-and-mortar casinos had a more mixed performance. Parx Casino remained the top performer with $30.2 million in slot machine revenue, despite a 4.25% decrease year-over-year. Wind Creek Bethlehem, in contrast, posted a 2.1% increase, generating $24.2 million in slot revenue. Rivers Casino Pittsburgh saw a slight decline in slot revenue, down 2.36% to $20.7 million.
Table Games Dip Slightly
Table games across the state brought in $73.4 million in revenue, a 2.33% drop from the previous year. Despite this, the overall impact on the state’s total revenue was minor, thanks to the growth in iGaming and sports betting.
Pennsylvania’s Total Tax Revenue
In total, the state collected $211.2 million in taxes from its various gaming platforms in September 2024. Of this, $51.1 million came directly from internet casino gaming. Pennsylvania’s $6.21 billion wagered through iGaming casinos was the second-highest in the state’s history.
Top-Performing Casinos
- Valley Forge Casino Resort: Valley Forge led the pack in overall revenue, with a massive 29.5% year-over-year increase, bringing in $85.6 million.
- Hollywood Casino at Penn National: This casino saw a 7.10% rise in revenue, generating $82.5 million.
- Parx Casino: Despite leading in slot revenue, Parx experienced a 6.52% decrease in total revenue, reporting $52.2 million.
- Rivers Casino Philadelphia: The casino recorded a 7.84% increase in revenue, reaching $51.1 million.
Jackpot Justice or Regulatory Roulette?
A coalition of Pennsylvania casinos is taking their fight against a hefty slot machine tax to the Supreme Court. This high-stakes legal battle could redefine the future of gaming in the state and potentially reshape tax policies nationwide.
The House Always Wins? Not This Time
Thirteen of Pennsylvania’s 17 land-based casinos, including heavy hitters like Hollywood Casino and Live! Casino & Hotel, are calling the state’s bluff. They’re challenging the constitutionality of a 48-54% tax on gross slot machine revenue, a rate that would make even the most seasoned gambler think twice.
Skill Games: The Wild Card in the Deck
The casinos’ legal gambit stems from a recent lower court decision that left “skill games” – slot-like machines found in bars and convenience stores – outside the Pennsylvania Gaming Control Board’s jurisdiction. These skill games, which require players to identify winning paylines manually, have become the joker in this high-stakes game of legal poker.
Show Me the Money: A Billion-Dollar Bet
With Pennsylvania casinos ponying up nearly $1 billion in slot taxes last year alone, the financial implications of this case are staggering. The casinos argue that the current system is about as fair as a loaded dice, creating an uneven playing field where they’re heavily taxed while skill game operators roll free.
Legislative Limbo: Proposals on Ice
As the legal drama unfolds, legislative efforts to address the skill game conundrum have hit a wall. Governor Josh Shapiro’s proposed 42% tax and a bipartisan 16% tax suggestion are both collecting dust while the courts deliberate. Meanwhile, the skill game lobby insists their machines are more Robin Hood than highway robber, providing crucial income for small businesses.
The House Edge: Record Revenues Despite Challenges
Despite the controversy, Pennsylvania’s slot machines are far from snake eyes. The state gaming board reported a record-breaking $2.46 billion in slot revenue for 2023, a 3% increase from the previous year. New casino openings, like the Parx Shippensburg satellite, have helped fuel this growth.
Conclusion: The Digital Frontier
As Pennsylvania’s brick-and-mortar casinos wage war on the slot tax front, the rise of online gambling adds another layer to this complex issue. The potential Supreme Court decision could have far-reaching implications for the burgeoning world of digital gaming. If physical casinos succeed in lowering their tax burden, it could level the playing field with their online counterparts, who often operate under different tax structures.
Moreover, a ruling in favor of the casinos could prompt a surge in online gambling offerings, as operators seek to capitalize on potentially more favorable tax conditions. This could lead to increased competition in the digital space, potentially benefiting consumers through better odds and more diverse gaming options.
As the lines between traditional and online gambling continue to blur, the outcome of this case may set a precedent for how states approach taxation in the ever-evolving landscape of digital entertainment. One thing’s for certain: in this high-stakes game of tax and regulation, all bets are off.
