Records are made to be broken, and broken and broken.
For the third straight year, US commercial gaming revenue reached a new all-time high. Let’s explore the recent figures behind this newfound record and examine how the online sportsbook industry is capitalizing on it.
Breaking the Bank
According to the American Gaming Association (AGA), the total revenue from commercial casinos, sports betting and iGaming topped $66 billion last year –a 10% increase from 2022– and reset the record books once again.
When the revenue from tribal gaming is added to the total, the total annual gaming revenue for the United States in 2023 will likely approach $110 billion. We’ll get those figures from
the National Indian Gaming Commission later this year.
Out of the 35 commercial gaming jurisdictions operational in both 2022 and 2023, 31 experienced an increase in total revenue from land-based casino games, sports betting and iGaming. Within this group, 28 jurisdictions set new annual revenue records, a notable achievement that included nine of the top 10 highest-grossing commercial gaming states.
“From the traditional casino experience to online options, American adults’ demand for gaming is at an all-time high,” said AGA President and CEO Bill Miller.
Sports Betting Legalization Fuels Revenue
One of the most notable trends in 2023 was the surge in sports betting activity.
The AGA reported that Americans legally wagered more than $41 billion on sports in 2023, up 127% from 2022. Sports betting revenue was up nearly 45%, almost reaching $11 billion.
The continued maturation across most existing markets and the addition of several new markets, such as Massachusetts and Ohio, fueled the growth.
iGaming Also Plays a Major Role
Another key driver of the gaming industry’s performance in 2023 was the growth of iGaming, or online casino gaming, which includes slots, table games, poker and other games.
Online gaming brought in over $16 billion, making up nearly 25% of the total revenue. iGaming was especially appealing to customers who preferred the convenience, safety and variety of playing from their own devices.
iGaming also benefited from the integration of social and interactive features, such as live dealers, chat rooms and leaderboards that enhanced the user experience and retention.
Brick and Mortar Casinos Bounce Back
Even with the growth of online gaming, in-person gaming still plays a crucial role in the industry.
In 2023, traditional brick-and-mortar gaming, like casinos with slot machines, table games and retail sports betting, made up the majority of revenue at $50.02 billion and accounted for a little more than 75% of the total.
The AGA noted that 2023 was the first year since 2019 that all 25 states with commercial casinos were operational for the entire year, following the widespread closures and restrictions due to the COVID-19 pandemic in 2020 and 2021. 41% of the adult population –or 102 million Americans– visited a casino for gambling or other reasons in the past year.
Additionally, there’s a noticeable trend of younger people engaging in gaming activities. Over the past four years, the average age of casino patrons has steadily declined, reaching 42.0 years old in 2023. Consequently, the average age on the casino floor has dropped by nearly eight years compared to 2019.
Innovation Contributes to Big Gaming Numbers
This is partly because the US commercial gaming industry continues to showcase its capacity for innovation and diversification in response to evolving customer preferences and expectations.
The AGA highlighted examples of how gaming operators enhanced their products and services:
- Gaming operators offered cashless and contactless payment options, such as digital wallets, mobile apps and prepaid cards, improving the speed, security and convenience of transactions.
- They developed loyalty and reward programs, including tiered memberships, points, bonuses and free plays, incentivizing customer loyalty and satisfaction.
- Operators created immersive and interactive experiences, like virtual reality, augmented reality and gamification, boosting engagement and enjoyment of gaming.
They also expanded non-gaming amenities, such as hotels, restaurants, spas, retail and entertainment, attracting and retaining a wider and more diverse customer base.
Gaming Industry Generating Revenue and Jobs
The gaming industry also demonstrated its value and contribution to society by generating nearly $12 billion in tax revenue for state and local governments, supporting almost 2 million jobs and donating $446 million to charitable causes. Additionally, it continued to uphold its commitment to responsible gaming, investing $405 million in research, education and prevention programs, while promoting the use of tools and resources to help customers play responsibly.
Where Does Gaming Revenue Go From Here?
Despite the economic headwinds and inflation affecting many other sectors, the US commercial gaming industry demonstrated remarkable resilience and growth in 2023. The outlook for 2024 and beyond is optimistic, with expectations of maintaining momentum and capitalizing on upcoming opportunities.
Why? The industry is expecting to see more states legalizing and regulating sports betting and iGaming, more innovation and diversification of gaming products and services, as well as increased collaboration and partnership among gaming stakeholders.
Another record-breaking year is not out of the question.
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