Pennsylvania Sportsbooks Win Big, Spend Big in September

The Pennsylvania Gaming Control Board reported $95.8 million in gross sports betting revenue for September on Thursday as the state's 10 mobile operators aggressively sought business through promotional play.

The $42.3 million in credits and bonuses shelled out was an all-time monthly high in nearly six years of wagering in the Keystone State and 43.4% above the then-record $29.5 million outlay from September 2023. It was nearly triple the $15.4 million in perks given in August and accounted for 23% of the $185.2 million overall spend this year.

Operator winnings surged 44.9% higher compared to last year as the 11.8% hold on $811.3 million in accepted wagers continued the nationwide rout of the betting public sportsbooks enjoyed in September. The revenue haul trailed only the $98.1 million claimed last December followed by the $97.7 million accrued the following month to start 2024.

Handle was up 11.7% from last year, and the $5.73 billion wagered in the first nine months of 2024 is up 14.8% from last year. Gross revenue increased 22.2% to $569.5 million as the 9.9% win rate is six-tenths of a percentage point higher.

The state re-directed $18.2 million of the $53.5 million in adjusted gross revenue to its coffers, lifting the year-to-date total to $130.7 million. That is $20.2 million ahead of the 2023 pace.

At What Cost Winning?

The start of the NFL season is also essentially the kickoff of the busiest part of a sportsbook's season. That means attracting and retaining business, and promotional spend is one of the most effective ways to do so — though it may not always be the most efficient.

By virtue of their status as 1-2 in practically every state they conduct wagering, FanDuel and DraftKings expectedly account for the bulk of such spending in every state. In Pennsylvania, a high-tax and unlimited deduction state, the two behemoths often go dollar-for-dollar and that is what happened in September.

FanDuel had an outlay of close to $13.8 million in credits and bonuses, a mere $120,800 more than DraftKings. That helped FanDuel maintain separation as the top mobile outfit in Pennsylvania, surpassing $40 million in gross winnings for the third time while crafting a 12.7% hold against $316.9 million worth of wagers. It was the sixth straight month FanDuel notched a double-digit hold as its total winnings for the year topped $275 million.

DraftKings made the most of its year-best $234.1 million handle, claiming $26.4 million in fashioning an 11.3% win rate. It was DraftKings' second-best haul in Pennsylvania, behind only the $27.9 million accrued last October.

Despite the $27.4 million spend between the two of them, FanDuel and DraftKings still remitted a combined $13.4 million in taxes as they totaled $38.4 million in adjusted revenue. FanDuel had 65.9% of its revenue taxed, while DraftKings had 48.4% of its winnings levied.

The third-highest spend came from bet365, which shelled out more than $6.5 million in its third month of operations. That put the England-based book's total outlay just shy of $11 million, and it is currently carrying an AGR deficit of minus-$3.7 million. Bet365 did have a strong September, notching a 13.3% hold on $30.5 million worth of wagers to retain close to $4.1 million.

Bet365, ESPN BET, Fanatics Sportsbook, and BetRivers — when counting their Pittsburgh and Philadelphia totals together — were separated by $2.7 million handle for the fourth through seventh spots. As a legacy sportsbook, BetRivers was arguably the most cost-effective of the quartet when it came to spending, as its outlay of $731,800 was the lightest. It also had the lowest revenue of the group at $2.7 million while taking $31.1 million worth of bets.

Fanatics led the group in handle ($33.2 million) and revenue ($3.8 million), but it also had a notable outlay ($3.2 million). ESPN BET had a notable uptick in spend compared to August at $776,800, but with only a 4.2% market share in September, it would not be surprising to see parent PENN Entertainment dig deeper into its pockets as ESPN BET's first-anniversary nears.

BetMGM was a comfortable third in revenue and handle, the latter reaching a year-high $51.6 million. Its $5.8 million in winnings resulted in an 11.3% hold, but BetMGM is still reinforcing its status through spending. Its $3 million outlay was more than double last September and most since a slightly higher amount in May 2023.

Caesars narrowly made it nine mobile books with $2 million in revenue, eclipsing the benchmark by $13,500. It had a 6.5% increase in revenue despite a 25% downturn in handle to $23.3 million. Caesars also eschewed the promotional spend game — its $454,700 outlay was 41.5% lower than 12 months ago.

A Milestone for Retail Sportsbooks

Pennsylvania's 17 sportsbooks combined to notch a double-digit hold for the third straight month, posting a 13.8% win rate in claiming $6.3 million in revenue from $45.8 million handle. A pair of Philadelphia venues, Live! and PARX, each topped $1.2 million in winnings.

September winnings were enough to push all-time brick-and-mortar revenue in the Keystone State above $250 million, with $28.7 million coming this year. Despite the benchmark, retail wagering is down year-over-year — revenue is down 6.9% while the $321.6 million handle is 7.9% lower.