Pennsylvania provides an interesting window on how land-based and online gaming sectors have performed during the Covid-19 pandemic. The following graphs chart the changes in Pennsylvania gaming revenues throughout the pandemic, to date.
The chart below shows the collapse of land-based table and slot revenues in March, April and May and their subsequent recovery in June and July. It seems that there was some pent-up demand which drove July and August revenues. With the ongoing pandemic and the lessening of pent up demand both land-based slot and table revenues declined through October. October land-based slot and table revenues are 77 percent of their February totals. Online slots quadrupled between February and October while online tables had a more gradual and less dramatic growth just doubling between February and October. Poker, which accounts for less than 0.5 percent of overall gaming revenues, nevertheless grew by 33 percent. Both online and retail sports betting have increased dramatically since February as this sector has developed.
These changes have wrought a significant restructuring of PA gaming revenues with land-based contributing less, while online contributes significantly more, with the sports betting industry exploding. Notably online sports betting now contributes over 11 percent to PA gaming revenues.
% of Total PA Gaming Revenue
| February | October | |
| Tables | 13.5% | 9.9% |
| Slots | 79.2% | 58.1% |
| Online Slots | 3.8% | 15.2% |
| Online Tables | 1.3% | 2.6% |
| Online Poker | 0.3% | 0.4% |
| Online Sports | 1.6% | 11.5% |
| Retail Sports | 0.2% | 2.4 percent |
The following graph charts changes by sector. Land-based revenues in February account for 93 percent of all PA gaming revenues, but by October this had fallen to 70 percent. Conversely online now accounts for 30 percent of total PA gaming revenues compared to 7 percent in February. Online Sports Betting varies dramatically from month to month and in October accounted for 11.5 percent of total PA gaming revenues. This can be expected to grow as sporting events return in full force and as the sector develops.
While land-based revenues are now 77 percent of their February total, total gaming revenues in October are at, or close to, their February totals. The ability of the PA gaming market to achieve this is due to the performance of the online gaming industry which saw consistent steady growth pre-pandemic, explosive growth as a result of the closure of land-based casinos, and has continued to show growth since land-based casinos reopened.
This is reflected in tax receipts to the Commonwealth. Prior to the shutdown of land-based casinos online gaming accounted for approximately 10 percent of PA gaming tax receipts and this was increasing. During the pandemic shutdown it accounted for 100 percent of gaming tax receipts. When land-based casinos reopened they did so with restrictions limiting revenues and thereby tax receipts. In July through September land-based casino accounted for 80 percent of PA gaming tax receipts. In October with the growth of online sports betting land-based fell to 70 percent of the total while online gaming accounted for 30 percent of total PA gaming tax receipts, a threefold increase compared to the pre-pandemic period.
In total post-shutdown tax receipts in PA from gaming are 5 percent-6 percent higher than in February despite a to 20 percent decline in tax revenues from land-based gaming. This has only been made possible by increasing tax receipts from online gaming.
Online gaming, which was a developing and growing sector before, received a significant boost with the closure of land-based casinos. That growth has continued despite the reopening of land-based casinos, albeit with restrictions. This has led to a rebalancing of PA gaming revenue sources with online now accounting for up to 30 percent of total gaming revenues. Land-based revenues are currently 79 percent of what they were in February while online gaming revenues have increased by 383 percent. As a result, total revenues are now 3 percent higher than what they were in February. Tax receipts in total are 5.6 percent higher than they were in February because of the 343 percent growth in receipts from online gaming sector. Pennsylvania and its online gaming industry have demonstrated that an online sector can provide a vehicle to replace lost land-based gaming revenues and taxes (assuming similar tax rates) when disruptions occur. It remains to be seen if, and to what extent, online gaming will continue to thrive and grow as land-based casinos fully reopen, and if it will generate new incremental gaming revenues (and taxes) rather than cannibalizing land-based revenues.
