The recent ‘Pennsylvania Interactive Gaming Assessment: Online Gambling Report 2023′ has provided valuable insight into the burgeoning world of virtual betting across Pennsylvania. Since the legalization of online gambling in the state in 2017, Penn State’s Criminal Justice Research Centre, in collaboration with the Pennsylvania Department of Drug and Alcohol Programmes, has meticulously monitored the effects of this industry’s growth on the local population.
According to the report, which synthesizes three years of responses from over 1,800 adults statewide, there was a significant uptick in online gambling during the 2022-23 financial year. A 5% increase saw participation climb to 16%, from 11% the previous year and a 4.9% increase from 2021.
In fiscal terms, online gambling revenues skyrocketed to a staggering $2.1 billion, marking a nearly 27% increase from the preceding year. Glenn Sterner, assistant professor of criminal justice at Penn State Abington and the report’s lead, stated, “As we see increased revenue and advertising for online gambling, this report serves as a way for the Commonwealth of Pennsylvania to understand the potential impacts on individuals, families, and communities.”
The behavior of gamblers was thoroughly assessed, revealing that dual-mode gamblers—those who bet both online and offline—gambled approximately once a week. In contrast, those who gambled exclusively online did so two to three times a month, with offline-exclusive gamblers betting just once a month. These varied gambling habits were also reflected in time spent, with dual-mode gamblers dedicating on average 14.88 hours per month, online-exclusive gamblers 5.3 hours, and offline gamblers merely 1.47 hours.
Financial expenditure on gambling reported by dual-mode players averaged $708 monthly, surpassing the $617 spent by online-only bettors, and dwarfing the $103 by those who gambled solely offline. Furthermore, the study unveiled a concerning trend among dual-mode gamblers, with over half displaying at least one indicator of potential problem gambling behavior. Out of the online-exclusive monthly gamblers, 40.7% showcased similar risk indicators, while merely 16.4% of offline-only players did so.
The report emphasized sports as the most popular online betting avenue, drawing in 7% of adults over the last year, while fantasy sports engaged 3.4%. The lottery remained the offline favorite, with 50.5% of Pennsylvanians partaking, followed closely by 40.9% participating in instant lottery games.
Despite the legitimation of interactive gambling (igaming) in only a handful of U.S. states, Pennsylvania’s extensive range of offerings stands out. Nonetheless, the prevalence of illegal and unregulated gambling persists, with the report citing that 3.2% of respondents dabbled in illicit online gambling over the past year.
These findings bring to light the confusion over which gambling websites are legal, exacerbated by American Gaming Association (AGA) research indicating that 55% of users of offshore betting platforms mistakenly believed they were engaging with legal operators.
One significant concern raised in the context of igaming is the potential for it to undercut land-based casino revenues. The report records a 5% decrease in offline gambling to 62.5%, but this does not seem to align with an Eilers and Krejcik Gaming study, which reported a positive impact of online casinos on their land-based counterparts’ revenues.
The EKG study assessed the gross gaming revenue (GGR) in terms of compound quarterly growth rates both before and after igaming’s introduction and found enhanced growth in all reviewed states post-igaming introduction. Survey responses from both online and land-based casino operators further refuted the cannibalization narrative, with the majority reporting no significant changes to land-based revenue, and 20% noting a moderate increase due to the online counterparts.
This detailed overview from Pennsylvania’s latest Interactive Gaming Assessment encapsulates the evolving dynamics of the gambling industry’s online segment and its wide-reaching effects on the economy, consumer behavior, and regulatory challenges moving into the future.
