The American Gaming Association (AGA) released the group’s quarterly gaming revenue report in mid-November, revealing growing numbers for the U.S. gaming industry across the board.
That included total gaming revenue $16.3 billion, an increase of 6.7% compared to the same period in 2022. This was the 11th consecutive quarter of year-over-year growth.
“Despite a slower pace of growth than in previous quarters, Q3 was the industry’s highest-grossing third quarter ever and second-best single quarter for commercial gaming revenue,” the AGA noted in the report.
More Details on U.S. Gaming Revenue
The report paints a nice picture for the industry, not including tribal operations. Total revenue for the first nine months of 2023 reached $48.8 billion, 10.1% higher than the same period in 2022.
“Even with potential softer Q4 revenue this year, 2023 is poised to become the third consecutive record-breaking year for the commercial gaming industry,” the AGA reports.
Expansion helped land-based casino operations. Kentucky sports betting launched in the third quarter and Illinois and South Dakota saw new casinos. Sports betting was also unveiled in Maryland (online expansion), Massachusetts, Nebraska (retail), and Ohio.
The AGA reports quarterly gaming revenue grew year over year across all verticals – slots, table games, retail sports betting, and online (casino and sports betting). This led to single-quarter records for land-based and online gaming. Revenue growth in total land-based gaming accelerated from growth of 0.9% in the second quarter to 1.6% in the third, for a total of $12.6 billion.
Comparatively, online gaming slowed, dropping 44.4% in the second quarter to 29.9% in the third. Combined revenue from online sports betting and iGaming totaled $3.5 billion, accounting for 22.2% of total commercial gaming revenue – the lowest share since the third quarter of 2022.
Other Highlights
A few other aspects from the report stand out. Among the country’s 33 commercial gaming jurisdictions operational one year ago, 18 saw an increase in third quarter revenue from 2022 with five setting new single-quarter records including Nevada and New Jersey, the country’s largest commercial gaming markets.
Nevada revenue grew 2.9% year over year, reaching $3.9 billion. A record-breaking quarter for Strip casinos ($741.2 million) led the growth along with the highest baccarat win in state history – $458.4 million, a 50.1% increase year over year.
New Jersey’ highest-ever gaming win of just under $1.6 billion was an increase of 8.6% from the third quarter 2022. This included new quarterly highs for iGaming ($469.6 million) and sports betting ($268.2 million). In the live casino arena, Atlantic City casinos produced their second-best quarter ever for land-based slot machines and table games ($816.8 million).
Among states with quarterly declines, most saw low single-digit drops while the sports betting-only markets of Montana (-6.9%), New Hampshire (-18.7%), and Washington, D.C. (-33.2%) experienced the sharpest declines.
Looking ahead, most states are poised to exceed their 2022 revenue totals. Year to date, seven jurisdictions remained flat or experienced changes of less than 1% compared to 2022. Indiana (-2.0%), Mississippi (-3.5%), and Washington, D.C. (-11.1%) trailed last year’s pace through September.
Sports betting continues to be popular and produced revenue of $2.2 billion for the third quarter, up 22.8% from the same period last year. The addition of Maryland, Massachusetts, Nebraska, and Ohio were key drivers.
Americans bet $24.1 billion on sports in the third quarter, 38.9% higher than 2022. Through September, commercial sports betting is on pace for another record-setting year, according to the AGA. Revenue reached $7.2 billion through the first nine months, an increase of 52.9% compared to last year and nearly equal to the entire total from 2022. Year-to-date handle stands at $79.76 billion, a 24.5% annual increase.
States, Communities Rake in Tax Money
Third-quarter growth not only benefited the industry, but also various taxing entities. State and local governments in gaming states collected $3.4 billion in taxes tied directly to gaming revenue, according to the AGA. That’s an increase of 5.2% from the third quarter 2022.
If the trends continue, the commercial gaming industry is on track to contribute a record level in taxes for state and local governments. Through the first nine months, the industry has paid out $10.7 billion in gaming taxes. That equates to a 10% increase from the first three quarters of 2022.
The amount paid to taxing authorities is even higher considering other revenue contributors. The AGA also notes that these figures don’t include fees collected on an annual basis or sports betting excise taxes paid to the federal government. The figures also don’t include billions of tax dollars paid on income, sales, payroll, and various corporate taxes.
