The iGaming industry in the United States represents a significant and growing segment of the overall gambling market. To understand its potential, let’s start with a brief overview of iGaming and then go into the specifics of the U.S. market, including the current state and potential for growth.
iGaming, essentially online gambling, includes activities like online casinos, sports betting, and poker. The industry is rapidly expanding globally due to technological advancements and increased internet accessibility.
U.S. Gambling Market Size
The U.S. gambling market has experienced significant growth, especially in recent years. In 2022, the market size of online gambling in the United States was valued at approximately $9.3 billion. This substantial figure is expected to further increase to around $16.0 billion by 2028, indicating a compound annual growth rate (CAGR) of about 9.2% from 2023 to 2028. This reflects the increasing popularity of online gambling activities such as sports betting, casino games, and others.
Plus, the global gambling market, of which the U.S. is a major part, was estimated to be around $747.9 billion in 2022. This market is projected to reach approximately $876 billion by 2026, growing at a CAGR of 3.6%. This global perspective highlights the substantial role of the U.S. market in the wider gambling industry.
The surge in the U.S. gambling market size can be attributed to various factors, including the rising penetration of IoT-based devices, the growing adoption of online gambling due to its convenience, and the implementation of cashless transactions. The COVID-19 pandemic has also played a role in shifting consumer preferences from traditional brick-and-mortar casinos to online gambling platforms.
These trends in the U.S. gambling market indicate a strong consumer interest and a favorable environment for continued growth in both the online and overall gambling sectors in the coming years.
iGaming’s Role and Current Revenue
iGaming is a significant contributor to the U.S. gambling market. In 2022, iGaming revenue from six active states reached $5.02 billion, marking a 35.2% increase from the previous year. This growth was achieved even without the introduction of iGaming in new states that year. The consistent year-over-year growth in iGaming revenue demonstrates its growing importance within the overall gambling sector.
States like New Jersey, Michigan, and Pennsylvania, which have embraced iGaming, are seeing notable revenues. In these states, iGaming has become a key contributor to their gambling revenue, showing how state-level legalization and regulation can lead to significant economic benefits.
New Jersey
New Jersey, a frontrunner in the iGaming industry, has witnessed exceptional growth. In 2023, the state’s internet casinos generated over $155 million in July alone, a 13.5% increase compared to the same month in 2022. By the first seven months of 2023, online sites had already accumulated $1.085 billion in revenue, surpassing the total of the previous year by 14.2%. This remarkable growth trend is evident throughout the year, with online casinos consistently generating over $12 million more per month compared to 2022.
The revenue figures for the first seven months of 2022 and 2023 in New Jersey highlight a clear upward trajectory, showing that internet casinos are not just maintaining their growth but are setting new records. This trend is expected to continue, with predictions for the last five months of 2023 suggesting an average growth of around 15%.
Michigan’s iGaming Market
Michigan’s entry into the iGaming market has been notably successful. Since legalizing online gaming in January 2021, the state has seen a steady increase in revenue.
In September 2023, Michigan reported a combined total of $210.4 million in internet gaming and sports betting gross receipts, with iGaming gross receipts alone amounting to $166.4 million. This was a 20% increase compared to August 2023, demonstrating the rapid growth of the market.
November 2023 saw a continued increase in iGaming revenues, reaching $175.3 million, the highest to date for Michigan. This was a significant jump from the previous high of $171.8 million recorded in March 2023. The state’s total internet sports betting handle also reached a new high in November, amounting to $568.8 million. These figures underscore the robust growth and potential of the iGaming sector in Michigan.
Comparing Michigan’s iGaming performance with that of New Jersey highlights the dynamic nature of the U.S. iGaming market. Both states have shown substantial growth, with New Jersey being an early adopter and leader in the market. In 2023, New Jersey’s online casinos surpassed the $1 billion mark in revenue, showing a growth rate of over 14% from the previous year. Michigan, while a newer entrant, has quickly caught up, showcasing the potential profitability of iGaming ventures in various U.S. states.
Pennsylvania
Pennsylvania’s iGaming market has also shown significant growth and is a vital part of the state’s overall gambling revenue. In April 2023, the Pennsylvania Gaming Control Board reported a total gaming revenue of $476.7 million, with iGaming slot revenue contributing $95.6 million and iGaming tables revenue adding $38.9 million. This represents a significant increase in iGaming revenue, with iGaming slot revenue up by 24.66% and iGaming tables revenue up by 16.09% compared to April 2022.
Further demonstrating the strength of Pennsylvania’s iGaming market, in October 2023, the state’s total gaming revenue increased by 7.3% year-over-year to $483 million. The iGaming sector contributed substantially to this growth, with iGaming slot revenue at $109.8 million, up by 27.24%, and iGaming tables revenue at $42.6 million, up by 19.44% compared to October 2022. These figures indicate a robust and growing interest in iGaming within Pennsylvania.
Future Growth Potential
The U.S. iGaming market shows signs of significant growth potential. With the industry already experiencing substantial year-over-year increases in revenue, the trend is expected to continue. The introduction of iGaming in more states, coupled with technological advancements and increased accessibility, could lead to further expansion of the market.
The ongoing growth in states that have already adopted iGaming is a positive indicator for other states considering legalization. As more states legalize iGaming, the U.S. market could see an even greater increase in overall gambling revenues.
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