The legal commercial betting segment in the United States has completed five years and marked the special occasion by surpassing the $100 billion figure in FY2023. After recording substantial year-on-year (YoY) spikes in the three quarters of this year, the US sports betting segment is expected to finish the year with another splendid quarter. A record-high volume of a little over $934 million in November made Pennsylvania the driving force behind this result.
Before 2023, there were 32 states where online and retail sports betting was legal in the US. This year, five more states joined the roster. Of the newly legalized jurisdictions, the betting markets of Ohio and Massachusetts performed extremely well and played a vital role in taking the nation’s betting handle to $100 billion before the end of the year. The betting activity is increasing steadily, as $79 billion was wagered in the first three quarters of this year.
Last year, the annual wagering handle closed at $93.79 million, making it the most rampantly growing gambling segment in the country. The Gross Gaming Revenue (GGR) of 2022 was $60.42 billion, almost 14 percent higher than the GGR of 2021. While Slots remained the biggest segment in the US, the sports betting segment showed the most promising growth with a YoY increase of 72.7 percent, taking the segment revenue to $7.5 billion in 2022.
Consistent Growth Over All Three Quarters in 2023
The fourth and final quarter of FY2023 is expected to record another YoY and quarter-on-quarter (QoQ) increase. Sports betting is legal in 38 states and Washington, DC. Vermont is the latest jurisdiction that has legalized the segment and its market is expected to go live in 2024. Meanwhile, the plans to legalize the betting segment in California will need more effort as the tribes are against the decision for now.
The Californian betting market could be one of the most active and competitive betting markets in the US. However, even without it, the segment has performed exceptionally well. The year started with the sports betting GGR touching $2.8 billion in Q1 2023, marking a massive 70.1 percent YoY increase. In the process, sports betting also overtook Table Games and became the second-biggest segment in the same quarter, behind Slots.
In the second quarter of this year, a 56.6 percent YoY increase saw sports betting reel in GGR of $2.3 billion. It remained the fastest-growing segment ahead of iGaming, which was up by 22.5 percent in Q2 2023. Considering the first half of this year and comparing it to the corresponding period last year, the sports betting GGR increased by 65.5 percent, accumulating $5.15 billion in the first six months of 2023.
Commercial Gaming Revenue Grew by Over Six Percent in Q3
The rampant growth of the sports betting segment in the US continued in the third quarter of 2023. After collecting $2.23 billion from regulated jurisdictions, the betting segment GGR spiked 27.7 percent YoY. The majority of the revenue was generated via online channels, as bettors and gamblers opted for digital platforms over traditional gambling methods. This change was evident in the iGaming segment, as it spiked 26 percent, accumulating $1.52 billion.
The total GGR reached $48.78 billion in the first nine months of 2023, and Slots remained the biggest segment, contributing $26.7 billion to the aggregate, marking a slender 3.8 percent YoY increase. Table games were up 2.3 percent as the segment’s GGR rose to $7.6 billion. Sports betting collected $7.2 billion between January and September this year, marking a 53 percent growth, while iGaming GGR rose to $4.49 billion after a 23.8 percent spike.
Revenue Set to Break Record for the Third Successive Year
The American Gaming Association (AGA) compiled the state regulatory disclosures to find that revenue worth $16.26 billion was generated by all legal gambling segments in the third quarter of this year. Due to this, the total GGR for the nine-month period between January and September 2023 touched $48.78 billion, which is only $11.64 billion shy of the annual GGR of FY2022.
On average, the legal gambling operators in the US have generated over $16 billion in consolidated revenues in each quarter this year. Based on those statistics, a similar figure can be projected for the fourth quarter, leading to another record-breaking year for the gambling industry in the US. Considering the GGR growth pattern of FY2022, the legal gambling operators in the US must accumulate well over $16 billion in revenue in the final quarter.
However, the AGA is set for less gambling activity in Q4 2023. Despite that, a quarterly GGR of a minimum of $12 billion will also help the US break the annual revenue record for a third consecutive year. The state and local governments have also benefited from the steady GGR increase, as a whopping $3.42 billion was generated in gaming taxes in the third quarter of this year.
Sports Betting Set to Smash Records
The sports betting activity usually slows down towards the end of the year in almost every regulated gambling jurisdiction in the world. However, the betting segment still marked an impressive 27.7 percent increase and accumulated $2.23 billion GGR in Q3 2023. The primary reason behind this increase was the massive contribution of legal sportsbook operators in Maryland, Massachusetts, Nebraska, and Ohio.
Traditional sports betting has been offered in Maryland since Dec. 2021, but the online sportsbook segment was introduced this year. The retail betting markets of Massachusetts and Nebraska went live in 2023. Meanwhile, Ohio also jumped on the retail and online betting bandwagon in the same period. An aggregate of $358.7 million was generated from these four new markets.