Market Growth Rate, Online Gambling Outlook, and Culture
Coming out of the COVID pandemic, the US gambling industry is showing strong growth indicators as more consumers invest in online gambling products. While more players are moving online (a result of the pandemic and the demographic makeup of gamblers), there's also a strong history of land-based gambling, with casino gaming as the dominant commercial sector. Popular with US citizens and international tourists alike, more than half of the world's leading casino companies are in the USA.
According to the American Gaming Association (AGA), the commercial sector has bounced back from COVID restrictions and closures, with a 77% revenue increase in 2021 compared to 2020. The commercial and online sectors are contributing to the projected 17.34% CAGR, along with the expectation of new states regulating online gambling and adding to the revenue pot.
Player Insights by Generation
Mordor Intelligence adds that many gamblers in the country are currently considered "digital natives" relying heavily on technology, with millennials making up a significant percentage of the population in the USA. Findings from a study conducted by LaneTerralever in 2022 reported that 36% of millennials and 48% of Gen Z have only ever placed online bets, showing a substantial move towards technology-based gambling as would be expected with younger, more tech-driven generators reaching gambling age. The LaneTerralever report went further, breaking down their player insights by generation, finding that:
- Gen Z - Play for the Experience
- Millennial - Technology-Driven Player
- Gen X - Incentive-Focused Player
- Boomer - In-Person Gaming Seeker
Additionally, 74% of the 1,384 casino players studied (across generations) expected a casino to have a mobile app.
Unsurprisingly, technology is the go-to way to gamble for younger generations. Slightly more surprising is that a combined 70% of millennials and Gen Z players said that the legalization of sports betting made them more likely to visit a casino in person, showing a ripe opportunity for future cross-selling between online and retail sectors: casino loyalty clubs could be the perfect vehicle for this.
Top 10 States by Casino Revenue
According to Statista and the American Gaming Association (as quoted by Mordor Intelligence), by total casino gaming revenue (not disaggregated for online or retail), these are the top 10 generating states in 2021:
Nevada, home to Las Vegas, one of the world's most popular retail gambling locations, obviously hit the top spot. Meanwhile, Pennsylvania and New Jersey fill the second and third spots thanks to a mix of retail and online casino revenue.
Top 3 Online Casino States By Revenue in 2022
- NJ: Internet gaming in NJ created a total revenue of $1.66bn in 2022, up 21.6% on 2021's figures. Total gambling revenue for all activities (retail and online, sports and casino) hit records at $5.21bn.
- MI: According to the Michigan Gaming Control Board, internet gaming generated $1.58 billion in 2022 - a 41% increase on 2021. The total gambling revenue for all activities was $4.6bn.
- PA: iGaming created $1.36bn in revenue in PA in 2022 (a 22% increase), with total gambling revenue at $5.21bn.
New Jersey is the biggest online casino gambling state, with the most internet casinos operating and the largest revenue figures. While this is likely to stay the same, Pennsylvania could rise as an online rival, as it has a larger population. The PGCB recently re-opened online-only license applications, which could have an impact should the number of online casinos increase to match the NJ market.
Interestingly, in 2022, Michigan came in second for online casino revenue, not Pennsylvania; Michigan is the newer market as online casinos in PA went live in 2019 vs. Michigan's 2021 launch. For all Internet casino states, revenue is projected to keep rising over the next five years.
Biggest Gambling Operators by Market Share
With MGM, Flutter, and Caesars operating an online sportsbook or casino in almost every gambling state that allows the activity, it's not surprising that these operators take the largest market share of the US online gambling market. What's more, in 2022, 888 Holdings and EveryMatrix teamed up to better leverage the rewards of the US market. These key players are expected to consolidate their market share over the coming years, except for Cherry Gold, which could see its market share slip as consumer awareness of legal and safe online gambling grows.
*Cherry Gold is an offshore casino operating with Curacao licensing; Casinocabbie.com does not endorse, recommend or advertise offshore casinos.
Continued Growth of Sports Betting
According to Mordor Intelligence's report, sports betting is the fastest-growing sector of US online gambling (more US states have legalized online sports betting over casino gaming; thus, it is far more widely available). Bettors tend to focus on the games they know rather than those they don't, which gives them a better advantage in making a profit.
According to Forbes, as of January 2023, 26 states allowed mobile sports betting (up from 18 in 2022). This legalization is paying off, with a total of $5.77 billion in GGR generated from sports betting in the first ten months of 2022, up 78% yearly.
As more states legalize (Texas, California, North Carolina, Missouri, and Kentucky are tipped to be following) sports betting over the next five years and more players join the legal betting economy, revenue and growth figures will continue to rise rapidly. In comparison, US online casinos are only regulated in 6 states.
Which States Are Likely to Legalize Online Casinos?
While there is a continued drive toward the remaining US states legalizing retail and internet sports betting, the legalization of online casinos is moving much slower. However, industry insiders speculate that these states could be next to regulate and benefit from legal online casino gaming.
- New York
- New Hampshire
- Maryland
- Indiana
- Illinois
- Massachusetts
- Ohio
- And Kentucky
Find out more by reading our complete analysis of which US states are most likely to legalize online casinos in 2023.
More Awareness of Responsible Gambling
As is the case with all gambling markets moving past the point of infancy (consider EU gambling jurisdictions, which have moved from more liberal to stricter player protections, including stake limits and affordability checks), the US will see more awareness of responsible gambling, as well as more concerted efforts to educate consumers regarding legal internet gambling and the offshore industry (whether this is third-party or regulator-led).
The signs are already there, with the AGA reporting a shocking scale of offshore gambling and wider responsible gambling campaigns, such as mandated responsible gambling warnings on gambling ads in Ohio and the restriction of specific bonus terminology, the NJDGE introducing a new initiative to flag customers displaying problem gambling behaviors, and operators voluntarily seeking responsible gambling accreditation from bodies such as the Responsible Gaming Council. How will this affect growth and financial forecasts over the next five years? Realistically, it's unlikely to have a significant impact as the speed of legalization in new states will outpace responsible gambling efforts.
*All graphics sourced from Mordor Intelligence - United States Online Gambling Market - Growth, Trends and Forecasts Report for 2023-2028
