By 2022, a legal online poker industry in Pennsylvania could generate $364 million per year. This prediction was made in a new report commissioned by Online Poker Report in a paper entitled: Regulated Online Gambling: A Billion Dollar Opportunity for Pennsylvania.
The report shows that if Pennsylvania passed online gambling legislation this year, and the industry was rolled out in 2018, it could generate as much as $230 million in its first year of operation. The report predicts that the industry would grow by nearly 60% in the first five years, meaning that by 2022, it could be making $364 million.
“Assuming a tax rate of 20 percent, regulated online gambling in Pennsylvania will pay $46 million in taxes to the state in its first year. After five full years, operators will have contributed $426.3 million in taxes and fees to state coffers,” reads the report.
The report also predicts that online poker revenue will dip nearly 15% by its fifth year of operation, from $41 million in its first year, to $35 million in its fifth year.
“The Pennsylvania online gambling industry will be driven primarily by the online casino vertical,” it is written in the report. “We estimate that online casinos will account for 87.4 percent of market share. This is relatively in line with historical New Jersey online gambling market trends, where online casino comprised 81.7 percent of industry revenue in years one through three, and 86.5 percent last year alone.”
Comparing a potential online gambling market in Pennsylvania to the existing one in New Jersey, the report argues that Atlantic City is more of a destination resort while Pennsylvania’s brick and mortar casino industry is comprised mostly of local brands that are spread throughout the state. “Thus,” predicts the OPR report, Pennsylvania online casinos should be better equipped to market to their unique data bases than Atlantic City brands.” According to the report, targeted promotional offers could go a long way toward driving internet traffic.
Still on the comparison, the report points out that Pennsylvania has the advantage of better equipped mobile products from day one – something that New Jersey’s industry lacked in its infancy. “Because mobile products are generally comprised of a greater percentage of lower return slots compared to their desktop counterparts, Pennsylvania online casinos will average a higher hold, and thus reap more revenue,” it is stated.
The report also touches on issues such as demographics, payment processing, predictions on the size of Pennsylvania’s market at maturity and more.