legal-united-states-poker-sites
  • Online Poker
    • Card Rooms
    • Poker Apps
    • Real Money Online Poker
    • Poker Games
      • Caribbean Stud
      • Mississippi Stud
      • Texas Hold'em
      • 5 Card Stud
      • 7 Card Stud
      • 5 Card Draw
      • 3 Card Poker
      • Omaha
      • Omaha Hi Lo
      • Horse Poker
  • Reviews
    • Americas Cardroom
    • Betonline
    • Black Chip Poker
    • Bovada
    • Everygame
    • Ignition
    • Juicy Stakes
    • Sportsbetting Poker
  • Deposit Methods
    • Bitcoin
    • Prepaid Visa
    • Visa
    • Cash App
    • Mastercard
  • Poker By State
    • Alabama
    • Alaska
    • Arizona
    • Arkansas
    • California
    • Colorado
    • Connecticut
    • Delaware
    • Florida
    • Georgia
    • Indiana
    • Idaho
    • Indiana
    • Illinois
    • Iowa
    • Kansas
    • Kentucky
    • Louisiana
    • Maine
    • Massachusetts
    • Maryland
    • Michigan
    • Minnesota
    • Mississippi
    • Missouri
    • Montana
    • Nebraska
    • Nevada
    • New Hampshire
    • New Jersey
    • New Mexico
    • New York
    • North Carolina
    • North Dakota
    • Ohio
    • Oklahoma
    • Oregon
    • Pennsylvania
    • Rhode Island
    • South Carolina
    • South Dakota
    • Tennessee
    • Texas
    • Utah
    • Vermont
    • Virginia
    • Washington
    • West Virginia
    • Wisconsin
    • Wyoming
  • World Series of Poker
    • Schedule
    • Main Event
    • Satellite
  • Poker Strategy
    • Bankroll Management
    • Betting Rules
    • Bluffing
    • Check Raising
    • Hand Rankings
  • Tournaments
Flag Background
Home › News › Predicting Pennsylvania Online Gaming Revenue

Predicting Pennsylvania Online Gaming Revenue

Written by Jennifer Newell
Last updated on February 24th, 2025
poker money It has been little more than one week since Pennsylvania legalized online poker and casino games as a part of a larger gambling expansion bill. One may say it is too soon to estimate potential revenue from the new online gambling industry considering the Pennsylvania Gaming Control Board has yet to begin devising and revealing any regulations. However, with the tax rates and licensing fees set, as well as numbers from years of online gambling in neighboring New Jersey, there are some ways to predict possible revenue.

Just the Facts

What is known about the online gambling industry is what was detailed in the legislation that passed on October 30 and was signed by Governor Tom Wolf days later. And what is pertinent to this article is online poker, table games, and slots, setting aside daily fantasy sports (DFS). The online gaming industry, as easily compared to New Jersey, is poker, slots, and table games only. Land-based casino operators will be able to obtain a license to operate online games for $4 million each, though the choice to offer poker, slots, and table games offers a bargain price of $10 million for all three if they do so within the first 90 days of the application period. Software providers will be able to pick up licenses for $1 million each. Gross gaming revenue will be taxed at 16% for poker and table games but 54% for online slots.

Many Unknowns

There are a number of factors that can change in the lead-up to the license application period and the eventual launch of the gambling sites in 2018. The most significant one will be the number of land-based operators that apply for licenses. It is unlikely that all 12 casinos and racinos that are currently in operation, plus another that is now authorized to be built, will apply for licenses. And the number of licenses for each is also the subject of much speculation. It is also unknown the role that the very high 54% tax rate will play into the licenses and the eventual profits of the casinos that do offer online slots. While they are the most profitable of all online games offered in New Jersey, much of that profit may be washed out by the tax in Pennsylvania. It is unclear which casinos will take the chance on eking out a profit or if lawmakers will reconsider the 54% tax before the licensing period is over. Finally, it is assumed that Pennsylvania will eventually sign on to the interstate online poker agreement recently approved by New Jersey, Nevada, and Delaware, but it is not certain, and there are few guesses as to when that might occur, if it does. This will change revenue projections as well.

Analyst Projections

One analyst did release a white paper, published on the Play Pennsylvania website, that attempts to make projections based on what is known about the gambling environment in Pennsylvania and the other states’ results in the burgeoning industry thus far. The first projection is that Pennsylvania will likely collect $120 million from licensing fees. That number was derived as follows:
  • 5 bargain prices triple licenses at $10 million each = $50 million
  • 7 slots, 7 table games, 1 poker license at $4 million each = $60 million
  • 10 software provider licenses at $1 million each = $10 million
The second projection is online gaming revenue will be less than in New Jersey due to the effective tax rate of 42%, which was calculated as follows:
  • Slots = 67.5% of revenue distribution in New Jersey
  • Table games = 22.5%
  • Poker = 10%
With that rate so high as compared to the 17.5% tax rate in New Jersey, online gambling operators will have less money for all other components of a successful online gambling industry. These percentages of revenue are broken down as follows:
  • NJ = 5% profit // PA = 5%
  • NJ = 24% advertising // PA = 12%
  • NJ = 20% player retention, promotions // PA = 10%
  • NJ = 18.5% payment processing, geolocation, customer ID, content royalties // PA = 18.5%
  • NJ = 17.5% taxes // PA = 42%
  • NJ = 12.5% staff, administration // PA = 10%
  • NJ = 2.5% other regulatory fees // PA = 2.5%
The third projection involves the ability to capture black market online gaming traffic, as demonstrated by other regulated markets. The capture rate is determined by the rate of taxation on revenue, as that determines how well the regulated sites can compete for consumer dollars. This information was derived from Copenhagen Economics:
  • UK tax rate = 15%, capture rate = 95%
  • Denmark tax rate 20%, capture rate = 88%
  • Italy tax rate = 20%, capture rate = 80%
  • Spain tax rate = 25%, capture rate = 70%
  • Portugal tax rate = 41%, capture rate = 52%
  • France tax rate = 45%, capture rate = 52%
Finally, the last projection involves online gambling revenue by way of market size. The model used took three major factors into consideration: performance of other US markets, impact of tax rate and licensing fees on marketing and promotions, and reduced ability to capture black market revenue. Keep in mind that the first year’s estimates do not take any interstate liquidity into consideration, while the rest of the years do incorporate shared player pools.
  • Year 1 = $154 million ($41 million poker, $113 million other casino games)
  • Year 2 = $174 million ($43 million poker, $131 million other casino games)
  • Year 3 = $214 million ($43 million poker, $171 million other casino games)
  • Year 4 = $248 million ($43 million poker, $205 million other casino games)
  • Year 5 = $275 million ($43 million poker, $232 million other casino games)
While predictions and forecasts for the New Jersey market as it prepared to launch were inaccurate on many counts, the above information for Pennsylvania is based on information from New Jersey, a very similar market and much more information from other regulated markets around the world than was available four and five years ago. Other factors that can impact the above predictions include a revised tax rate, neighboring states entering the US market and interstate compact, and any other significant economic changes in the broader US.  

Comments

Leave a CommentCancel Reply
Placeholder Image Sign Up
WSOP cash money

Where to Play Cash Games at the WSOP

Hero Image for Strategic States

Strategic Thinking Across America: The 10 Smartest States Ranked

who has the most wsop bracelets?

Who Has the Most WSOP Bracelets?

See All
Ian Pelz Winning the Gladiators Event

Pelz on Top After Gladiators of Poker Battle for Bracelet

Tag Team Winners 2025

Kerber and Patricio Take Tag Team Gold in Brazilian WSOP Classic

Jesse-Yaginuma-2025-WSOP-Millionaire-Maker-winner-photo

The WSOP Risks Brand-Suicide If It Fails To Payout The Millionaire Maker Champion And Runner-Up

See All
Legal Us Poker Sites
Browse Our Site
  • Poker Reviews
    • Ignition Review
    • Bovada Review
    • Everygame Review
    • BetOnline Review
    • Juicy Stakes Poker Review
    • Americas Cardroom Review
  • State Laws
    • Texas
    • Florida
    • California
    • Virginia
    • Washington
    • Ohio
  • Georgia
  • Illinois
  • Colorado
  • New York
  • Arizona
  • Massachusetts
  • Wisconsin
  • Contact Us
  • Responsible Gambling
  • About Us
  • Sitemap
  • Privacy Policy
You Are In Safe Hands
Our Recommended Poker Sites Have Been Verified by
18+ BeGambleAware MGA
Follow us:

© 2024 Hyperdrive Promotions UAB | All Rights Reserved. Trust in Your Bets, Gamble Responsibly.
For Visitors 18 Years and Older.

Hyperdrive Promotions UAB
Level 27, Wing On Centre, 111 Connaught Road Central
Sheung Wan, Hong Kong
Tel:+1 (419) 601-6487