The U.S. commercial gaming industry generated record results for a third consecutive year.
According to the American Gaming Association’s (AGA) State of the Industry, the U.S. commercial gaming industry saw revenue reach a record $66.5 billion in 2023, a 10% increase compared to 2022’s previous record of $60.5 billion. The results marked the industry’s third consecutive year of record revenue as gaming grows in popularity.
“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. “Sustaining our momentum will take unified industry efforts around combating pernicious illegal operators and growing responsible gambling efforts in tandem with the growth of the legal market.”
Traditional casinos continued to bode well for the commercial gaming industry as gross gaming revenue from slots reached a record $35.5 billion in 2023, a 3.8% increase year-over-year, while table games posted $10.3 billion in revenue, up 3.5% compared to 2022.
Brick-and-mortar casinos drove record profits in 2023 despite strong growth in iGaming. The iGaming vertical, which is currently regulated in six states, saw revenue close at $6.1 billion last year, a 22.9% increase compared to 2022, marking another record in gaming.
Michigan and New Jersey lead iGaming with each state generating $1.9 billion in revenue in 2023, while Pennsylvania emerged as the third-largest iGaming market behind $1.7 billion in revenue.
Sports betting posted the largest growth in revenue amongst verticals in gaming.
The U.S. sports betting market, which is made up of 39 jurisdictions, generated $10.9 billion in revenue in 2023, a 44.5% increase year-over-year. The record revenue was driven by a $119.8 billion total sports betting handle, which was up 27.8% compared to 2022.
The impressive handle was bolstered by the addition of five new betting markets in 2023.
The markets included Kentucky, Maine, Massachusetts, Nebraska and Ohio. Together, the states generated $1.4 billion in revenue from sports betting. New York emerged as the top U.S. sports betting market behind $1.6 billion in revenue, a 24.2% increase year-over-year. The AGA’s latest report excludes data from December in Arizona and Kentucky’s November and December results.
Illegal gaming having an impact
The AGA could continue to see substantial growth in sports betting as the group and other gaming organizations crack down on illicit wagering.
The U.S. commercial gaming industry could also get a boost from the shuttering of fantasy operators in certain jurisdictions across the country. Last week, regulators in Florida and Arkansas ordered PrizePicks, Underdog Fantasy, and others to shutter pick’em-style contests in their respective jurisdictions. The decision stems from the contests resembling player prop betting markets, which violates state laws.
“We’re in lockstep with our industry partners to ensure each of these states that these skill game manufacturers either play by the same rules we do, or they get shut down,” continued Miller. “And on offshore websites, we continue to work with the Department of Justice and state regulators on enforcement and technology platforms that host and offer these illegal websites and the media that often unwittingly feature them.”
Americans wager $400 billion annually with unregulated operators, per GeoComply. The illicit wagering has caused the legal industry to miss out on over $30 billion in revenue.
