US commercial gaming generates $16.26 billion in revenue in Q3 2023, iGaming revenues increase 26% year-on-year
In the third quarter of 2023, the US commercial gaming industry experienced a notable period of financial growth, according to the American Gaming Association’s (AGA) Commercial Gaming Revenue Tracker.
The whole commercial gaming industry generated a total aggregate revenue of $16.26 billion in Q3, marking a 6.7% increase compared to the same period in the previous year. This figure represents the best third quarter on record and the 11th consecutive quarter of annual revenue growth. iGaming (which mostly refer to real money online casinos) legal in six US states, had a particularly strong quarter, grossing $1.52 billion, a 26% increase year-over-year.
The quarter under review, Q3 2023, is the second-highest-grossing commercial gaming quarter ever, trailing slightly behind Q1 2023. Despite signs of a potential slowdown in the fourth quarter, the industry is on track to achieve a third consecutive record year, currently pacing 9.9% ahead of 2022 through September.
“With growth across land-based and online gaming, we are delivering career opportunities for millions of Americans and strong economic contributions to communities across the country through increased tax revenue. Our sustained momentum reflects gaming as a first-choice entertainment option for millions of American adults,” said AGA President and CEO Bill Miller.
“Americans continue to migrate their action to the protections of legal, regulated sportsbooks in record numbers. This sustained demand only reinforces the need for federal and state enforcement against illegal offshore operators,” added Miller.
State and local governments in gaming states benefited from this growth, receiving approximately $3.43 billion in direct gaming taxes during the third quarter, a 4.7% increase year-over-year.
Revenue growth was observed across all industry verticals during Q3 2023, with land-based casinos and iGaming setting quarterly records. Traditional slot machine and table game revenues amounted to $12.49 billion, a 1.8% increase from the previous year.
The increase in iGaming revenue was consistent across several states, with Connecticut, New Jersey, and Pennsylvania each setting new quarterly revenue records. With year-to-date revenue of $4.49 billion, iGaming is 23.8 % ahead of the same period last year.
This growth in iGaming is especially notable as it coincides with the ten-year anniversary of full-scale iGaming operations in the US, which began with Delaware and New Jersey in late 2013. Over this decade, the six states with full-scale iGaming markets have generated a combined $16.32 billion in revenue, contributing over $4 billion in state and local taxes, despite iGaming being legal in only six states.
The combined revenue from in-person and online sports betting also showed growth in the quarter, with a 22.8% increase year-over-year, totaling $2.15 billion. Newer markets in Maryland, Massachusetts, Nebraska, and Ohio primarily drove this growth. Sports betting has seen a substantial increase in activity, with Americans wagering $79 billion through the first nine months of 2023, a 32.7% rise from the previous year.