Pennsylvania Leads U.S. in Casino Tax Revenue

Pennsylvania-Leads-U.S.-in-Casino-Tax-RevenuePennsylvania has outpaced all other states in collecting casino tax revenue, cementing its place as a leader in the U.S. gambling landscape. In 2023, the state’s tax revenue from casinos reached a record $2.3 billion, surpassing New York at $2 billion and far exceeding Nevada’s $1.2 billion.

The state owes much of this success to its tax structure, particularly its 52% tax rate on slot machine revenue, which dwarfs the 6-8% rates seen in Nevada. According to Doug Harbach, Communications Director of the Pennsylvania Gaming Control Board, this model significantly contributes to state coffers.

With a highly taxed and regulated system, Pennsylvania ensures its gambling industry supports public programs while generating substantial state revenue. In addition to traditional casino games, online casino platforms and sports betting continue to grow as critical revenue sources.

“Slots is taxed here at about 52% for the casinos,” Harbach explained.

Rapid Growth in iGaming and Sports Betting

Pennsylvania’s gaming market thrives not only in physical casinos but also in the rapidly growing online sector. Internet casino games like slots and blackjack are becoming increasingly popular, with national records for iGaming revenue being broken recently.

Sports betting, both online and in-person, has also seen robust growth. According to the Pennsylvania Council of Compulsive Gambling, $7.68 billion was wagered on sports in 2023. This segment has expanded largely due to the convenience of mobile apps, which allow users to bet from virtually anywhere.

However, professionals caution against overindulgence. Handicapper Raphael Esparza offered advice for responsible gambling: “Just because there’s a Monday Night Football game on TV, that does not mean you have to bet it.”

Despite its successes, the state’s gambling industry faces growing concerns about the accessibility and potential risks of gambling, as calls to 1-800-GAMBLER continue to rise.

Skill Game Ban Faces Legal Hurdles

While Pennsylvania benefits from its regulated gambling framework, the legal status of skill-based gaming machines remains contentious. The Commonwealth Court of Pennsylvania recently paused Philadelphia’s enforcement of a ban on these machines, pending an appeal to the state Supreme Court.

Skill games, often found in convenience stores, require players to complete simple tasks to win cash prizes. Critics argue they closely resemble slot machines and exploit loopholes to bypass gambling laws. Philadelphia’s City Council passed a ban on the machines in April, citing concerns over crime and their unregulated status.

However, proponents view these games as vital for small businesses. Mike Barley, spokesperson for Pace-O-Matic, a manufacturer of skill games, called the court’s decision “a victory for Philadelphia small businesses,” emphasizing the machines’ importance in generating supplemental income.

Governor Josh Shapiro has suggested regulating and taxing skill games at a 42% rate, similar to the state’s casino framework. Lawmakers are exploring ways to incorporate these machines into Pennsylvania’s regulated gambling industry while ensuring oversight and accountability.

As debates over skill games continue, Pennsylvania’s ability to balance industry growth with effective regulation will remain critical.

Source:

“Pennsylvania ranks first in casino taxes collected in US; professionals advise to gamble responsibly”, abc27.com, December 9, 2024.

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Pennsylvania Records $184.9 Million in Online Gambling Revenue in February 2024

The online gambling market in Pennsylvania is rapidly growing, which is proven by the fact that revenue smashed the records in February, even though other states recorded a year-on-year decrease in revenue.

Online gambling revenue

pennsylvania_igaming_revenue_reaches_record_dlr184_9m_in_february_According to the report, Pennsylvania generated $184.9 million in online gambling revenue in February.

Overall, the revenue was $499.1 million. Compared to the same period the previous year, an increase of 9.3% is recorded, since in February 2023 the revenue was $456.8 million. However, in January 2024, the total revenue was $464.4 million, so February recorded a decrease of 1.6%.

The main source of revenue in Pennsylvania is still retail slots which generated $202,7 million. The revenue was slightly decreased, but the growth is recorded when considering the number of slot machines decreased from 25,708 to 24,962.

Land-based table games also had a successful period, since the revenue generated from them was $76,6 million, representing an increase of 2.9%. In 2023, the Pennsylvania online gambling market reached a revenue of $131.6 million. Compared to that, total iGaming revenue grew by 40.5% to $184.9 million in 2024.

Online slots generated $125.9 million, 35.6% more than in the previous year, while online table games earned $56.6 million, which represents an increase of 56.7%. Online poker wasn’t as popular as it used to be in 2023, since it generated $2.4 million, 8.3% less than in the year before.

Industry leaders

The casino that saw the highest revenue is Hollywood Casino at Penn National Race Course. Its online gaming operations earned $77.3 million in February, 36.8% more than in the same month of 2023.

The second place took Valley Forge Casino Resort, which generated $44,8 million. The casino operations saw significant growth since the revenue increased by 63.0%. Rivers Casino Philadelphia took the third place, with $29.3 million and an increase of 11.4%.

Sports betting revenue

On the other hand, sports betting isn’t as popular as it used to be in 2023. When it comes to total revenue, it decreased by 30.0% annually, and in February 2024 it was $30.3 million. The online betting sector saw $28.2 million, and retail revenue was $2.1 million.

However, the total handle increased by 10.4%, and in February it was $661.7 million, while in 2023 that number was $599.5 million.

A leader in the sports betting industry was Valley Forge Casino Resort and its partner FanDuel that earned 17.7 million in revenue. The second was Hollywood Casino at the Meadows and DraftKings, with $7.7 million in revenue, and Hollywood Casino Morgantown and BetMGM were the third with $1.2 million. Video lottery terminals saw a decline of 2.4%, with a revenue of $3.2 million, and fantasy sports decreased by 5.2% to $1.3 million.

Source: Fletcher, Robert. “Pennsylvania iGaming revenue reaches record $184.9m in February”. iGaming Business. March 20, 2024.

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Pennsylvania Gaming Industry Reports Best Year Ever, 2023 Revenue Nearly $5.7B

Add Pennsylvania to the list of states calling 2023 their best year ever in terms of gaming. Joining New Jersey, which earlier this week announced record annual revenue, Pennsylvania on Thursday revealed that 2023 was a banner year for its gaming industry.

Pennsylvania gaming revenue casinos
Parx Casino was the top-grossing property in the Pennsylvania gaming industry in 2023. The year was a banner performance for the state industry, as revenue reached nearly $5.7 billion. (Image: Parx Casino)

Pennsylvania has brick-and-mortar casinos, iGaming, in-person and online sports betting, truck stop video gaming terminals, and fantasy sports. In 2023, the varying gaming interests combined to win a record $5.697 billion. The 2023 win represents a 9.3% year-over-year increase.

The year-end report from the Pennsylvania Gaming Control Board (PGCB) revealed that iGaming, consisting of online slot machines and table games, was primarily responsible for the record performance. Internet gamblers lost $1.74 billion, 28% more than they did in 2022.

Physical slot machines inside the state’s 17 casinos also fared well, as the terminals generated record gross gaming revenue (GGR) of $2.46 billion, a 3% improvement. Oddsmakers saw their sports betting hold climb more than 14% to a record $458.6 million.

The other verticals experienced slight year-over-year declines. Casino table game win dropped 2% to $990.5 million. VGT revenue fell 2% to $42 million, and revenue from fantasy sports contests slowed by 10% to $20 million.

iGaming Surging

iGaming in the six states where online casinos are legal continues to thrive. The $1.74 billion won by the online channels last year continued the sector’s impressive run.

Pennsylvania legalized iGaming through the state’s 2017 gaming expansion package. Online operations didn’t go live until late 2019.

iGaming’s first full year in Pennsylvania in 2020 came at a most suitable time. As the state ordered its physical casinos to shutter amid the pandemic, online casinos were open for play. iGaming platforms won more than $565.7 million that year.

Pennsylvania online casinos have only furthered their growth since. iGaming GGR in 2021 topped $1.11 billion, and ballooned to $1.36 billion in 2022.

The state’s land-based casinos have managed to increase their revenues despite iGaming’s significant revenue increases.

Retail slots and tables won $3.43 billion last year, a 1.6% year-over-year increase. The 2023 casino win also represents a 7% surge on 2021 GGR, but was only 5% richer than pre-pandemic 2019.

While brick-and-mortar casinos in iGaming states have managed to increase their year-over-year GGRs, analysts have expressed concerns that the online games could be slowing more robust brick-and-mortar growth.

Parx Leads

Parx Casino north of Philadelphia was the top-grossing casino in the commonwealth last year. The property won $386.2 million on its slots and $202 million on its tables for a combined haul of $588.2 million.

Parx and its sister casino, Parx Casino Shippensburg, are the only smoke-free casinos in the state.

Wind Creek Bethlehem placed second with GGR of $526.3 million, with slots accounting for $285 million and tables for $241.3 million.

As for iGaming, Penn Entertainment’s Hollywood Casino online brand led the way with revenue of $712.4 million. Penn held an impressive 41% market share of the iGaming industry. There are 12 online casino operators.

Pennsylvania Loses to New Jersey

Nevada and New Jersey had long been the country’s two richest gaming states until 2022 when Pennsylvania squeaked by the Garden State for second place. Pennsylvania’s 2022 GGR of $5,211,274,456 edged New Jersey by just $28,735.

New Jersey regained the second spot in 2023 after reporting GGR of more than $5.77 billion. Nevada hasn’t yet revealed its December numbers, but through November, the state’s casinos won more than $14 billion.

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Pennsylvania Casino Smoking Targeted in New State Legislation

Pennsylvania Rep. Dan Frankel (D-Allegheny) is no fan of smoking exemptions for certain businesses like casinos. For a second year in a row, the Allegheny County Democrat has introduced legislation in the Harrisburg capital that seeks to end the smoking loopholes for casinos and other venues currently immune from the state’s indoor smoking law.

Pennsylvania casinos smoking gaming
Cigarettes and cigars inside Pennsylvania casinos are being threatened by recently introduced state legislation. State Rep. Dan Frankel (D-Allegheny) thinks the state’s brick-and-mortar casinos should be forced to go entirely smoke-free. (Image: Shutterstock)

Pennsylvania passed its Clean Indoor Air Act in 2008. The law prohibits indoor smoking in most public spaces and workplaces. However, the law that was signed by Gov. Ed Rendell (D) provides certain exceptions for casinos, cigar lounges, private clubs, and bars where alcohol generates the bulk of the establishment’s revenue.   

Frankel doesn’t believe casino workers should be subjected to working in toxic environments where secondhand smoke is prevalent. Though Pennsylvania casinos are limited to allowing indoor smoking on only half of their gaming floors, health experts say dangerous secondhand smoke lingers into the supposed nonsmoking areas.

Government Action Needed

Pennsylvania is home to 18 brick-and-mortar casinos. Only Parx Casino in Bensalem, north of Philadelphia, and Rivers Casino Philadelphia in the city proper are fully smoke-free casinos. The rest have maintained designated smoking sections on their casino floors.

Frankel says the majority of the casinos seem intent on keeping smoking. And the state Democrat feels that’s unfair to employees and guests who don’t light up.

Pennsylvanians should not have to choose between their jobs and their health. Despite a growing body of evidence suggesting that smoke-free environments attract more customers — not fewer — these businesses have not banned smoking on their own,” Frankel said in his newsletter this week.

Frankel last week filed House Bill 1657. The statute seeks to amend the Clean Indoor Air Act by repealing certain provisions that allow casinos and other businesses and clubs to permit indoor smoking.

HB 1657 has been directed to the House Health Committee, which Frankel chairs. The committee is set to meet this Wednesday, Sept. 20, to consider the smoking bill.

Casino Workers Rejoice

For the many Pennsylvania casino workers seeking a clean-air workplace, Frankel’s introduction of the anti-casino smoking bill was welcomed news. The Pennsylvania chapter of CEASE — Casino Employees Against Smoking Effects — said the bill poses the opportunity to save lives.

We thank Rep. Frankel for introducing legislation that we know will save our lives,” said Jen Rubolino, a table games dealer at Rivers Casino and the co-lead of CEASE PA. “Too many of us have been left to deal with the dangerous effects of secondhand smoke including cancer, asthma, and heart disease. It’s time to finally close the casino smoking loophole to protect our health.”

Casino smoking remains in nearby Atlantic City and in West Virginia. But casinos in the four other states that border Pennsylvania — Ohio, Maryland, New York, and Delaware — fully prohibit indoor smoking.

In research published in February, the U.S. Centers for Disease Control and Prevention’s Office on Smoking & Health concluded that smoke-free casino sections still have “elevated levels of Particulate Matter.”

“Despite robust evidence about the harms of secondhand smoke, tens of thousands of casino employees and tens of millions of tourists are exposed to high levels of secondhand smoke in Las Vegas casinos annually,” said Office on Smoking & Health Policy Team Lead Michael Tynan. “The only way to protect people from secondhand smoke exposure is to prohibit smoking in all indoor areas.”

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Another Judge Rules That Pennsylvania Skill Games are Legal in the Commonwealth

another_judge_rules_that_pennsylvania_skill_games_are_legal_in_the_commonwealthFor nearly a decade now, judge after judge has ruled that Pennsylvania skill games known by the Pace-O-Matic name are legal in the commonwealth. yet prosecutors and agents of the Pennsylvania Bureau of Liquor Control and Enforcement (BLCE) seem hell-bent on finding a jurist who will take their side in the matter of “Chance v. Skill” and stand behind the authorities when they raid a local gathering place and seize the machines and any cash or collateral equipment associated with them.

So far, Pace-O-Matic’s Skill Games have been found to be legal in the state by rulings in the following courts: Beaver, Dauphin, Monroe, and York counties. Clearfield County and Delaware County reviewed the law itself and case law as created by those decisions and returned seized games without the need to go to trial and determine the facts for themselves.

Games Deemed Legal Since 2014

The Beaver County Court of Common Pleas ruling that Pace-O-Matic’s Pennsylvania Skill games are legal and games of predominant skill have stood since 2014 (ruling .PDF)

Once again a judge has ruled in favor of game providers. This time in Monroe County where the DA’s office and the BLCE carried out a raid on a small business there in 2022 and held the devices in a secure location until the gambit played out in court – again. Judge Mark said in his recent ruling that the gaming “devices are games of skill and not games of chance.”

In the same county earlier this year, prosecutors caught an earful from Monroe County Common Pleas Judge Jennifer Harlacher Sibum who scolded them for not only prosecuting non-criminal behavior but for misconduct in the investigation and prosecutions themselves. In fact, she used the withholding of crucial evidence and misrepresentation of evidence by the prosecution side of the equation as reason to suppress the actual evidence from a court hearing as the case was dismissed.

The court finds that the Commonwealth improperly withheld and misrepresented material evidence relative to the issuance of the search warrant in this matter and that such conduct warrants the suppression of the seized property,” wrote Judge Sibum in her order dismissing the charges and ordering the return of the machines, cash, and other instruments to the rightful owners.

According to a report on G3 Newswire, Wednesday judges in York County and Dauphin County have ruled against prosecutors and the BLCE in other cases this year as well.

Pace-O-Matic got its machines, cash, and related equipment back from prosecutors in York County after it was improperly seized by the Bureau earlier in 2023. In Dauphin County, the “L” was chalked up to prosecutors there, and the “W” for POM.

In that case, Dauphin County Common Pleas Judge Andrew H. Dowling wrote, “Initially, it is this Court’s belief that the Commonwealth’s investigation shows case bias. The Commonwealth is seeking to make all machines like the POM Machines into illegal gambling devices, and their whole approach and intent is to shut down games regardless of the actual gameplay… Thus, the Commonwealth as a whole is biased against the games, and their approach lacks case credibility.

Pace-O-Matic lawyer, Matthew Haverstick of Kleinbard, LLC, stated: “Pace-O-Matic’s Pennsylvania Skill games are legal. The Commonwealth has wrongfully seized its equipment for years with no credible evidence that the games are illegal. Judges are now carefully looking at the evidence and ruling in our favor.

Mike Barley, Chief Public Affairs Officer for the company added, “Again, another Pennsylvania court has found that Pennsylvania Skill games, powered by Pace-O-Matic, are legal games of predominant skill. With the legality of our games upheld repeatedly, we are eager to work with the Legislature to pass legislation that will fairly regulate and tax the skill game industry. In fact, Pace-O-Matic stands out among our competitors as the active driving force seeking additional regulation and taxation.

Pennsylvania Skill games are manufactured in the commonwealth and 90% of the profit generated from them reportedly stays inside the state. Earlier reports claim to show that “real casino” businesses are not cannibalized by play on the devices as those seeking to spend a few dollars for entertainment with potential prizes on the games visit a neighborhood mom-and-pop grocer or other stores, another nearby small business, a favorite fraternal or social club, the local volunteer fire company or a veterans’ organization without the need to plan travel, overnight accommodations, or even to plan any form of major budget expenditures.

The Same or Similar Games have been Banned by Law in Kentucky Since March 2023

The games do not enjoy the same standing in Kentucky where they were recently codified into law as unregulated and illegal.

Pennsylvania casino and lottery revenues have continued to grow year in and year out as the skill games find their way into more and more locations giving at least anecdotal evidence to advocate’s claims that it is a totally different clientele than would be found looking for flashing lights, bells and whistles, and big jackpots.

Sen. Gene Yaw who serves as Vice Chair on the Judiciary Committee in Harrisburg has introduced legislation that would tax the machines and reportedly provide some $300m a year in revenue to the commonwealth while regulating the games as well.

As part of most press releases from the company, POM often mentions that it “employs a team of former state police officers to enforce all terms of contracts and codes of conduct. These contracted terms limit the number of machines, where they are placed in a location and have protections in place to prevent anyone underage from playing the devices.

Source:Judge rules that Pennsylvania Skill games are ‘devices of skill’, G3Newswire, June 7, 2023

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