PA Gaming Revenue Hits Record $625M as Skill Game Ruling Looms

Pennsylvania saw record gaming revenue in May, though it was up only 4% YOY from last May. Still the total of $625.5 million was enough to edge out the previous record set way back in January of 2025. Retail slots and tables were essentially flat with brick and mortar slots bringing in $232 million, a gain of 3.2% over last May, while actual felt tables ticked up to $81 million, 1% uptick.

The real gains were in online slots where revenue climbed 14% to $202 million. Interestingly though, the online table games continued a months-long decline, coming in at roughly $50 million, down nearly 6%. Sportsbooks, especially online sports betting operators also had a rough month, with revenue down more than 11% to $52 million.

Unfortunately Pennsylvania doesn’t break out revenue by operator but instead by the retail casino which partners with the underlying operators or “skins”. For instance the biggest revenue belongs to Hollywood Casino at Penn National racetrack, with more than $98 million in revenue in May, but they partner with not only DraftKings, but BetMGM and Fanatics, muddying the waters on which operators had a good month.

The two other largest iGaming operators are Valley Forge Casino, which partners with FanDuel and posted nearly $70 million in revenue and Rivers Casino Philadelphia which partners not only with its in house app BetRivers but also with Borgata. Harrah’s Casino is number four with only $14 million in revenue showcasing the consolidation of iGaming revenue in just a few of the Pennsylvania brick and mortar casinos which have the technological know-how and equipment to host these highly profitable skins for disparate iGaming operators.

Total tax revenue for the Keystone state in May was nearly $270 million as the state has some of the highest gaming tax rates in the country. Online and retail slots are taxed at 54%, while most online and brick and mortar table games are taxed at 16%. In addition any individual winnings from online gaming are taxed at 3.07%.

For years the state has fought a scourge of grey market skill games that resemble slots but are purported to have a memory game or other gimmick which supposedly sets them aside from Random Number Generator (RNG) slot machines. These machines managed to avoid paying that onerous 54% tax rate levied on both online machines and those in retail casinos. This allowed them to swell to as many as 70,000 to 100,000 placements in nearly every gas station, fraternal organization, and restaurant in the state.

But the Pennsylvania Supreme Court finally ruled this month that these games are in fact gambling devices and must adhere to the state gambling laws. The state gave the many small businesses that rely on income from these machines 120 days notice before any new regulations take effect, which has left lawmakers scrambling for an equitable solution. Many believe they should be taxed at the same 54% rate as online operators.

A large number of Senate Republicans in the state capital of Harrisburg have gotten behind a compromise measure that would split the difference at 35%. The theory being that this would still allow many of these small businesses to keep the lights on and remain open, thus preserving many rural and small town jobs that might otherwise be lost.

And a third set of proponents including many of the route operators and machine manufacturers who argue that even at 35% many hundreds if not thousands of small businesses who have come to rely on their cut from these machines to stay afloat will close. They argue that a 16% tax and a $500 monthly fee per machine is the best way to ensure compliance without job losses and business closures.

Still it is hard to see a clear case where online operators and retail casinos who followed the law and have been paying their fair share of taxes this whole time are forced to pay a higher rate than those who have spent years dodging both taxes and regulation. But ultimately that will be decided by lawmakers as they try to juggle what many believe might be close to a billion dollar a year in new tax revenue from these machines with job security and the tax revenue from small businesses in villages and rural counties across the state.