July retail drop in Pennsylvania is being countered by sports betting and igaming.

Online gambling in Pennsylvania In September

The state's Gaming Control Board said that gambling revenue in Pennsylvania reached $500.8m (£384.2m/€450.2m) in July. This is up 6.1% from June of this year and 7.2% from the same month last year.

Retail slot machine revenue fell 4.8% year-on-year to $204.3m, but it is still the largest contributor to Pennsylvania's gaming coffers. Even though it declined 4.8% to $79.4m, land-based table revenue was third overall.

July iGaming Revenue Exceeds $174.3M
As we shift our focus to online gambling, we can see that the igaming industry in Pennsylvania is booming. Total igaming revenue for July was $174.3m, up 31.2% year-over-year.

Online slot machines accounted for $125.4m, or 32.2%, of this total. Online poker had a decline of 13.0% to $2.3m in revenue, while internet table games saw a 31.7% increase.

With $64.0m in revenue, an increase of 17.7 percent, Hollywood Casino at Penn National Race Course maintains its position as the leading igaming market participant. The second-place finisher was Valley Forge Casino Resort with $45.5 million, followed by Rivers Casino Philadelphia with $29.8 million.

Earnings from Pennsylvania's sportsbooks increase by 20.2%
July was yet another banner month for Pennsylvania's sportsbooks, with total handle increasing 22.5% year over year to $414.7m from both online and retail venues. A 12.7% hold brought in $52.7m in revenue for the sector.

Taxable revenue was $38.6 million, up 20.2% from the previous year, after adjusting for $14.2 million in promotional credits. While retail operators brought in $3.2 million, $35.3 million came from internet sports betting.

The sports betting market in Pennsylvania is still dominated by FanDuel, because to their partnership with Valley Forge Casino Resort. After promotional expenditure, FanDuel's wagering income in July was $17.9 million, up 31% from $166.4 million the previous month and down 10.8% from the previous year.

With $110.4 million in handling and $10.5 million in revenue for the month, DraftKings is still in second place. After that, in third place, with $1.9 million in monthly revenue, was BetMGM.

In terms of other gaming revenue, video gaming terminals contributed $3.5 million, representing a 4.3% increase. Also, there was a 9.0% rise, or $714,971, from fantasy sports.

How does Pennsylvania's tax revenue stack up?
Taxes in Pennsylvania brought in $207.7 million that month. There was an increase of 8.2% from July of the previous year.

The highest amount of tax, $103.2 million, was collected from slot machines, which were subject to a 54% levy on gross gaming revenue. The additional $13.1 million was generated by the 14% tax on land-based table gaming.

The overall igaming tax was $75.5m; however, the regulator did not specify which games were subject to this tax, while online slots are subject to a 54% rate as well. A total of $13.9 million came from sports betting's 34% GGR tax, $1.8 million from VGTs, and $107,246 from fantasy sports.

But twelve casinos in the state want to use taxes as a weapon to crack down on unauthorised skill games. The licensees are requesting that the Supreme Court rule that the 54% slot tax is unlawful, as skill game operators are exempt from paying taxes.

Unlicensed slot-like games may be operating in the state in the hundreds of thousands, according to some estimates. The owners of the casinos claim in their complaint that the money made from slot machines should be shared between the commonwealth and licensed businesses, but that unlicensed businesses should not be taxed on the same amount.