Gaming Analyst Says Pennsylvania Will Generate More Than $40 Mill

Posted by Carolyn on Nov 16, 2017 Posted in Poker Industry News | No Comments »

The state of Pennsylvania is ranked in 5th place in terms of population based on the 2017 World Population Review with 12.8 million residents and online gaming operators are looking forward to enter the Keystone stake as Pennsylvania only recently lifted the ban on online gambling and joined Nevada, Delaware and New Jersey as the only states in America to permit online gambling.

Gaming analyst Chris Grove recently published a report called ‘Analysis: Pennsylvania Moves To Regulate Online Gambling’ where he attempts to provide an idea as to what one can expect from Pennsylvania’s online gambling industry going forward. Grove draws a comparison with the state of New Jersey which has 9 million residents, which Pennsylvania roughly a 40 percent increase based on population.

iGaming Will Generate Over $40 Million

New Jersey Division of Gaming released its online gaming third quarter results recently which showed that gross gaming revenues (GGR) had hit $20 million. Based on these numbers, online gaming should reach $25 million by the end of 2017. When you take these numbers and add another 40 percent to it, Pennsylvania should be able to generate around $36 million in GGR.

Grove believes that the online gaming market in Pennsylvania will do a lot better in the first year and expects it to bring in $41 million and thereafter $43 million in revenue each year. New Jersey’s online gaming market brought in $29.8 million in its first year and it did so without PokerStars entering its market. The online poker giant only entered New Jersey in 2016 due to licensing issues the company faced. Grove expects PokerStars to be one of the first online gaming operators along with partypoker and 888poker to launch in Pennsylvania and hence expects Pennsylvania to do a lot better in their first year of operation.

Lower Marketing Budgets   

New Jersey charges an online gaming tax of 17.5 percent on all iGaming segments but Pennsylvania decided to break up its taxes and impose a 16 percent tax on online table games and online poker while hitting online slots with a massive 54 percent tax. Since online gaming operators depend heavily on income generated from online slots, it will be interesting to see how the situation pans out as iGaming operators will see limited profits from online slots due to the high taxes.

This could very well force them to work with lower budgets when it comes to advertising and marketing in Pennsylvania and as a result, the online gaming industry may not grow at a fast pace due to potential budget cuts. Pennsylvania is expected to raise $120 million from online gaming licensing fees and market analysts have already stated that Pennsylvania’s online gaming industry will do a lot better if legislators decide to cut down the taxes on online slots.

Grove expects the online gaming market in Pennsylvania to start out very well as there is typically a rush when new online gaming websites go live and believes the market will stabilize going forward as Pennsylvania looks to entered the interstate shared liquid agreement that is currently in place for Nevada, Delaware and New Jersey.

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