The launch of ESPN Bet back in November was a big story for the national online gambling industry. However, the launch of Hollywood Casino had a bigger impact here in Michigan.
While PENN Entertainment is certainly focused on growing its national sportsbook product, the cross-sell opportunities for its online casino are a high priority.
Early results have been positive for the latest of the new online casinos in Michigan. Monthly market shares in the state have already grown significantly.
As 2024 progresses, will Hollywood Casino be able to push for a top-5 spot in Michigan?
PENN reports average users up 207%
During the PENN Q4 investor call, CEO Jay Snowden reported that its average monthly active users for Q4 of 2023 was up 207%. That equated to approximately 771,000 average monthly active users.
That percentage was in comparison to Q4 of 2022, when PENN was operating Barstool Sportsbook, which ended in late 2023.
The launch of ESPN Bet in November drew a lot of interest and a lot of new user activity due to the partnership with the sports network.
ESPN Bet’s ability to draw in users gave Hollywood Casino traffic a large boost as well in states like Michigan where online casinos are legal.
PENN reported a 280% increase in monthly active users of its online casino product compared to Q4 of 2022.
Hollywood Casino boosts PENN’s iGaming business
The launch of the Hollywood Casino in Michigan has seen an immediate impact for PENN.
Starting in November, where it had just half a month of operation, PENN’s iGaming platform recorded $4.13 million in revenue. That was the highest total since March.
December then saw an all-time PENN record of $6.44 million, besting the previous high of $5.23 million from February 2021 when it was Barstool.
In January, Hollywood Casino had $5.1 million in online casino revenue. While over a 20% drop from December, it still was higher than any Barstool month since April 2022.
With the increase in monthly active users for the online app, Snowden said he expects the online casino revenue to keep improving as PENN continues to put more into the online casino.
“ESPN Bet has also helped boost our Hollywood-branded casino business, which has seen a nearly 280% increase in monthly active users providing a platform for future growth, with new proprietary content continuing to roll out from our PENN game studios,” Snowden said during the Q4 call.
When Hollywood Casino launched in Michigan, it featured just 115 slots. It now has 204 slot titles available with expectations that it will continue to grow somewhat rapidly.
PENN targeting big market share increase
As the overall Michigan online casino market continues to grow, the key statistic for PENN will be market share.
“You can see that cross sell (from ESPN Bet to Hollywood Casino) has been great,” Snowden said. “Our products today, I would say are good. But, it’s got to be great, and we’re working on that diligently with our product team. We think that we can see our market share from a handle perspective continue to grow probably to what our daily active in monthly active user share is.”
For the entire year of 2022, PENN’s Barstool Casino had 3.3% of the Michigan iGaming revenue market share.
From January-October of 2023, that market share number dropped to 2.2%.
Since Hollywood Casino launched in mid-November, here’s how the market share has looked for PENN in Michigan.
- November: 2.4%
- December: 3.5%
- January: 2.8%
Those market shares don’t jump off the page, but each show growth since the transition from Barstool to Hollywood Casino.
Ideally, PENN is aiming to get to 7% for its online gambling market share, which includes online gaming in Michigan.
“If we were to be at 7%, a couple of years out, could we be profitable? The answer to that is yes. What we don’t know as we sit here today is how many more states will legalize from a sports betting and online gaming perspective. But you should feel as though 7% and above is a level that we could definitely generate a profit. Obviously, we would want to have our iCasino market share close to those levels as well,” Snowden said.
Increasing the market share in Michigan won’t be easy, as the majority of operators have increased their monthly revenue.
For PENN to go from about a 3% market share to 7% would mean more than double the revenue it is generating now.
December’s record month of $6.44 million was just 3.5% of the market share. That means PENN is aiming to build Hollywood Casino to around $13 million+ in monthly revenue in Michigan.
Should PENN achieve that goal it would have Hollywood Casino competing to be a top-5 spot online casino revenue driver in the state.
