Pennsylvania Sports Betting November Handle Hits Record, Revenues Way Down
Pennsylvania recorded an all-time high betting handle in November, according to the latest monthly figures from the Pennsylvania Gaming Control Board.
The spike in handle was at least, in part, down to big interest in the launch of locally based Penn Entertainment’s ESPN Bet on November 14.
Despite the record-breaking monthly handle, the overall sports betting revenue for the state experienced a massive 75% year-over-year decline. Overall revenues totaled $12.9 million, compared to $52.9 million in November 2022.
That decrease in revenue is almost wholly attributed to the massive promotional spend Penn put in on ESPN Bet’s opening month in the operator’s home state. Other sportsbooks, like market leading DraftKings and FanDuel, were able to pull in significant revenues, but not enough for year-on-year growth, given ESPN Bet’s losses.
ESPN Bet’s Interesting Entry
In its first half-month of operations in Pennsylvania, ESPN Bet finished with a $7.8 million loss in revenue on a $65.1 million handle. That was around 7.4% of the total state handle, compared to 3.7% Barstool’s 3.7% in October.
Some of that handle was under Barstool Sports, which continued operating in Pennsylvania until the changeover on November 14. However, Barstool took in $32 million in bets in October, so that is a significant 107% rise in wagers from just two weeks of the new ESPN Bet operation.
The large handle increase, but overall loss for the month, was primarily due to its aggressive marketing strategy, although Pennsylvania’s bettors did have a good month overall against the ‘books.
ESPN Bet’s promotional spending for its debut month in the market amounted to almost $15 million. This high spend by one operator significantly contributed to the overall decline in sports betting revenue for the state.
ESPN Bet is owned and operated by Penn Entertainment, which is based in Wyomissing, PA. It licensed the branding of sports media giant ESPN for its latest sportsbook venture after losing a lot of money dropping Barstool Sports.
Despite these initial losses in some states, its strategy indicates a long term vision to secure a robust customer base, a common approach among new entrants in the market. Operators often go on an all-in promotional and marketing blitz in new markets, trading a hit on short short-term profitability to gain market penetration and brand establishment.
Market Dominance and Revenue Distribution
Despite ESPN Bet’s two-week debut, online and retail sports betting in Pennsylvania through November continued to be dominated by industry giants FanDuel and DraftKings. The two operators maintained their leading positions by some distance.
They accounted for 70% of the total wagering handle for a combined total of $637,157,147 in bets.
FanDuel was the most popular sportsbook in the state in November, with a $384 million handle that generated $8.4 million in revenue. On the other hand, DraftKings generated $7.8 million in revenue from a $253 million handle. In an interesting bit of symmetry, that is roughly equivalent to ESPN BET’s loss for the month.
FanDuel and DraftKings both experienced a drop in revenue from October, when they made $29.1 million and $28.1 million, respectively.
ESPN Bet’s two weeks was enough to propel it into third place in handle, where it moved ahead of previously solid, third-place BetMGM. The Nevada-based gambling giant dropped into fourth, with a $52.8 million handle and $1.7 million in revenue.
The Pennsylvania state coffers also felt the hit, as total tax take fell from $16 million in October to $4.38 million in November. Penn’s entire monthly loss on ESPN was taken off as promotional tax credits, although this situation will not be sustainable for the operator in the long term.