After a dramatic falloff during the COVID-19 lockdown, Pennsylvania gaming revenue is rebounding and was up nearly 13% in October over the same month in 2109, long before the pandemic hit.

Total Pennsylvania gaming and fantasy contests generated $320.2 million in October, up from $283.7 million in October 2019, according to data released Tuesday by the Pennsylvania Gaming Control Board. Pennsylvania authorities collected $105.7 million in state and local taxes, up from $87.4 million the year before.

But a closer look at the numbers suggests a fundamental shift in gambling behavior is under way because of the coronavirus. More gambling has moved onto the internet and out of brick-and-mortar casinos.

Revenue from games played inside casinos — slots and table games — is down $42 million or 16% from a year ago. Online gaming, including most sports betting, has boomed and now accounts for nearly a third of gaming revenue in Pennsylvania.

A year ago, gambling at casino slot machines and table games accounted for 92% of revenue. Last month, gambling inside a casino accounted for 68% of revenue.

The shift of business to smartphones and computers has cushioned the blow of the pandemic on casino operators in Pennsylvania as well as in New Jersey, and has served as a catalyst for other states with legalized gambling to accelerate moves to allow online wagering, said Roger Gros, publisher of Global Gaming Business Magazine in Nevada.

“Other states have seen this and they are jumping on the bandwagon,” said Gros. “Michigan just legalized online gaming along with sports betting.”

The rebound in gaming could suffer a setback this month, however, with the resurgence of infections from the coronavirus. Michigan this week ordered a three-week statewide suspension of operations at its casinos.

Rivers Casino Philadelphia will temporarily suspend operations on Friday to comply with Mayor Jim Kenney’s order restricting public gatherings. New Jersey Gov. Phil Murphy on Wednesday pushed back on suggestions that he order Atlantic City casinos to close, saying there’s no evidence the casinos are linked to outbreaks.

The new closures would be a blow to Pennsylvania casino operators, who had to furlough most of the 16,000 casino employees during lockdown from March through June. Not all casino employees returned to work because the facilities have also curtailed food, beverage and entertainment offerings under coronavirus operating restrictions.

Food, beverage and lodging are a substantial, high-margin business for casinos, said Gros, and in a resort such as Atlantic City, account for about 30% of a typical property’s revenues.

The rebound in revenues in Pennsylvania is a testament to the fortuitous timing of the state’s General Assembly, which legalized online gaming and sports betting in 2017, and video game terminals in truck stops, another new source of gaming revenue. Pennsylvania casinos launched online casino gambling and sports betting last year, just in time to work out the kinks before the coronavirus spread.

Internet casino games in Pennsylvania generated $59.7 million in revenue in October, compared to $4.9 million last year when only three casinos had launched their online offerings. Sports betting, which is mostly conducted online, generated $36.8 million in revenue in October, more than double the $15 million booked a year ago.

The surge in online gaming this year is partly caused by casino loyalists who have shifted some or all of their wagers to the internet, but gaming analysts also suggested that much of the online action is from new customers, based upon the pre-COVID experience in New Jersey, which launched online gaming more than five years ago.

Internet gamblers tend to be younger, and more of them are male, than typical casino patrons, who are attracted to the social experience and the atmosphere of the casino gaming floor, said Chris Grove, a managing director of Las Vegas gaming consultant Eilers & Krejcik.

“Online casino players are only looking to gamble for a brief period of time — they may be looking to fill in a 10- to 20-minute gap in their day,” Grove said. “That experience is distinct from the retail experience — the sensory overload of a typical casino, and the energy and the environment.”

How much of the shift online is permanent is a critical question for operators such as Stadium Casino LLC, the Maryland company that is spending $700 million to open the Live! Casino Hotel Philadelphia early next year, the state’s 13th casino. Stadium Casino this week became the first Pennsylvania operator to open a mini-casino in Westmoreland County outside Pittsburgh.

“The honest answer is we don’t know how much the changes are temporary vs. how much are permanent,” Grove said. “Thankfully we don’t have a lot of past pandemics that we can look to, to really guide us.”