Perhaps it was mostly the result of a Super Bowl marketing phenomenon, but Pennsylvania sports bettors enjoyed an extremely good February, relatively speaking.
Pennsylvania sportsbook operators collectively did have positive taxable gross revenue, about $16.8 million, but the TGR margin was slim by typical sportsbook standards — just a 3.2% hold. A normal hold is about twice that number.
In a handful of cases in Pennsylvania, sportsbooks reported taxable gross revenue in the red, according to the figures released Tuesday. The standout example was Hollywood Casino in association with Barstool Sports. That operator reported a net loss of more than $872,000 for the month, and it was on both the online side (about $726,000) and on the retail side (about $146,000). Wind Creek Bethlehem also reported an overall taxable gross revenue loss of $127,000 with online losses overtaking retail. There were a few others that hit the red, if only for online.
So, what was happening in the Keystone State in sports wagering last month?
|Total Handle||Mobile Handle||Gross Revenue|
|Change||Down 17.2%||Down 19.0%||Down 51.8%|
Mainly, certain operators were on a promotional credit binge by occasionally giving away money faster than they could make it back. For instance, Hollywood/Barstool reported about $5.81 million in promotion credits compared to $4.94 million in revenue. That was the extreme example, but the promotion giveaways were pretty healthy among many operators. State figures showed promotion credit giveaways hit almost $16.8 million in February; that was a record for the fiscal year (going back to July 2020).
A reality of the sports wagering marketing game is that companies try to attract new customers during so-called tentpole events. In sports betting, the Super Bowl is the very definition of a tentpole event.
So, some operators might have been way more generous than usual, specifically for the Tampa Bay-Kansas City Super Bowl, using that moment as a loss leader to beef up their customer list with new registrations. This year’s Super Bowl attracted 320,000 unique visitors to Pennsylvania sportsbooks online compared to 200,000 the previous year. So, in that regard, maybe you could say, “mission accomplished.”
But the overall weak revenue figures certainly cannot be attached to the game’s outcome (underdog Tampa Bay won, 31-9) because the hold for the Super Bowl in Pennsylvania was more than 17% — so, clearly the promotions atmosphere was what moved the revenue needle for the month.
The next set of revenue numbers for March will help indicate whether February was a one-off marketing situation for some Pennsylvania sportsbooks or whether there will be an ongoing promotions race for the hearts and wallets of Pennsylvania’s sports bettors. And March Madness could be another tentpole marketing event. We’ll see if the aggressive operators keep their foot on the promotions accelerator for that or ease off.