Pennsylvania has earned more than $385 million from gambling since the passage of a law to expand gambling in the state, according to a recent analysis by PlayPennsylvania.com.
“The most notable aspect of the significant revenue that has been generated is that this is almost completely from fees, rather than tax revenue gained from gamblers,” Jessica Welman, an analyst for PlayPennsylvania.com, said. “Clearly there is enough interest in Pennsylvania’s enormous market so far to generate the fees.”
PlayPennsylvania.com estimated the revenue using a combination of official statistics and estimates based on iLottery, keno, and virtual sports sales numbers.
According to the analysis, the state collected $19.6 million from online lotto games, $3.6 million from keno and $87,000 from virtual sports through October. Mini-casino auction profits generated $128 million, while interactive gaming petitions generated $94 million, casino licensing generated $78 million, sports betting petitions generated $60 million, and daily Fantasy Sports tax revenue generated $1.4 million.
Pennsylvania collected $799.8 million in taxes from statewide slot revenues in fiscal 2017-18. In February, the state estimated that it would generate more than $34 billion in general fund revenues for its 2018-19 fiscal year.
“If the point of the expansion was to fill short-term gaps in the state’s budget, then the expansion would have to be considered a success so far,” Welman said. “We believe that the gambling expansion will eventually prove to be a winner for the state’s budget, but the long-term picture is less certain. More casinos and sportsbooks must open before we get a clear picture of whether Pennsylvania’s relatively steep tax rates and license fees will produce the desired outcome.”
In November, the sportsbook opened at Hollywood Casino at Penn National, and more openings are expected in December and January. Pennsylvania will begin adding revenue from online gambling in early 2019.
“The addition of retail sports betting should help buoy a slowing Pennsylvania casino industry,” Dustin Gouker, lead sports betting analyst for PlayPennsylvania.com, said. “If New Jersey is any indication, though, the more significant revenue generator will be online sports betting. A successful rollout there should generate millions of dollars in tax revenue for the state.”