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Golden Nugget is ready to add to what’s been a stellar year for Pennsylvania online casinos.
DraftKings acquired the casino brand earlier this year. The two already run an online casino in West Virginia and hope to launch in Pennsylvania in the “back half” of 2023, DraftKings CEO said during the company’s Q3 earnings call.
How Golden Nugget fits into the Pennsylvania online casino market
As of now, there are 18 online casinos operating in Pennsylvania. By the time Golden Nugget and DraftKings launch next year, there may be more operators in the market.
There’s plenty of competition, but Golden Nugget will benefit from DraftKings’ online expertise and brand recognition. Additionally, the Pennsylvania market is a massive one.
Online casinos generated more than $700 million in bets in October, and online gambling generated more than $124 million in revenue.
Pennsylvania is a monthly contender for generating the most online casino revenue in the country. In March, for example, its online gambling produced more than $142.7 million.
That total was a record not only for the state but for the entire country.
Golden Nugget faces big-three in revenue battle
As lucrative as the Pennsylvania online casino market is, it’s really a story of the haves and have-nots.
Three casinos generate more than 75% of the state’s online gambling revenue: Hollywood Casino at Penn National, Rivers Casino Philadelphia, and Valley Forge Casino Resort. The other seven casinos fight for the scraps.
October’s revenue report is a good example of that:
- Hollywood Casino: $52.7 million
- Rivers Casino: $29.3 million
- Valley Forge Casino: $23.4 million
- Remaining seven casinos: $19.1 million
DraftKings sees Golden Nugget as a way to get online gambling revenue
Breaking into the Pennsylvania market has been a Golden Nugget ambition for a couple of years. It’s an endeavor that fits well with DraftKings’ focus on online gambling.
Robins said during the Q3 earnings call that DraftKings sees Golden Nugget “as a way to penetrate deeper into the iGaming market.”
In a statement about the Golden Nugget acquisition, DraftKings identified three main benefits:
- More revenue: DraftKings wants Golden Nugget’s iGaming-focused customers
- Better marketing: DraftKings gets a better ROI on their advertising spend via Golden Nugget’s customer base.
- Optimized tech: DraftKings in-house tech platforms can cut out some of the third-party expenses Golden Nugget was paying before the acquisition
Robins said about the acquisition:
“We anticipate that this acquisition will provide meaningful revenue uplift by utilizing our data-driven marketing capabilities and a dual brand iGaming strategy, gross margin improvement opportunities, and cost savings.”
