The AGA has released a new report indicating that USA’s gaming industry has smashed previous quarterly records with a $15 billion yield in Q3 2022. Join us as we crunch the numbers based on AGA’s Commercial Gaming Revenue Tracker.
Consumer demand for gaming entertainment in the USA is still high despite tough economic times over the last few months, characterized by rising inflation and a slow growth rate. In a report released on Wednesday last week by the American Gaming Association (AGA), USA’s commercial gaming revenue hit a new record of $15.17 billion in Q3 2022. This new high reflects a 2% jump from the previous record of $14.81 billion set in Q2 2022, as outlined by AGA’s Commercial Gaming Revenue Tracker.
Bill Miller, AGA President, and CEO commented on the stellar numbers saying:
Quote“While business challenges remain, high consumer demand continues to fuel our industry’s record success. Our sustained momentum in the face of broader economic volatility points to gaming’s overall health today and provides confidence as we look to the future.”
Gaming Growth Rate Outshone Overall Economic Performance
Although the third quarter of this year had two fewer weekends than Q3 2021, the commercial gaming revenue for the said period still managed to increase by 8.8%. Better yet, this upward movement for the US gaming sector was also higher than the country’s broader economic growth rate of 2.6%.
Further, AGA’s Commercial Gaming Revenue Tracker showed a positive movement across all gambling segments, with table games, slot machines, and sports betting setting quarterly records. Table games and slot machines at brick-and-mortar casinos collectively generated $12.27 billion, accounting for 80.9% of the total haul. On the other hand, sports betting brought in $1.68 billion, representing 11.1% of the 15.17 billion produced for Q3 2022. Finally, online gambling activity minted $1.21 billion worth of revenue, which made up 8.0% of the earnings.
If we look at online gambling and sports betting combined, the duo generated $2.89 billion worth of revenue in Q3 2022, which is 19.1% of the entire haul. The pair’s performance is increased from the 18.1% realized in Q2 2022 but lower than that of Q1, which stood at 19.7%.
After three consecutive quarters of solid results, USA’s gaming sector has garnered combined year-to-date receipts worth $44.48 billion, marking a 14.7% jump compared to the same period last year. No doubt, 2022 has so far been the best year for the gaming industry despite the various challenges it has encountered.
In its Commercial Gaming Revenue Tracker report, the AGA commended the industry’s capacity to face off adversities head-on, saying:
Quote“Despite macroeconomic pressure and tough year-over-year comparisons, consumer spending on gaming entertainment was resilient, keeping the industry on course for a second consecutive record-breaking year.”
Stunning Quarterly Performance Across Different States
29 out of the 33 US states whose gambling sectors were operational in 2021 have marked an increase in their Q3 revenue year over year. Moreover, 16 states experienced their best-ever quarterly performances in Q3 2022.
Of the states that crushed their previous quarterly proceeds, Nevada led the pack with $3.77 billion, followed by Pennsylvania at $1.33 billion, then New York with $1.06 billion. Michigan and Indiana rounded up the top 5 after generating $796.5 million and $728 million worth of revenue, respectively. With a yield of $1.44 billion, New Jersey was the only top-six commercial gaming hub in the country that failed to smash its top quarterly record.
However, some jurisdictions witnessed a decline in revenue in Q3 2022 compared to Q3 of last year. For example, Washington DC, Mississippi, Maine, and Delaware saw drops of between 0.6% and 3.5%. Moreover, Washington DC continued to lose its customer base to recently unveiled markets in Virginia and Maryland.
By September, almost all states were on track to outperform their entire 2021 commercial gaming revenue totals. Additionally, by the end of Q3 2022, only three jurisdictions are trailing their performance in the first nine months of 2021. Washington DC has experienced the most significant drop of 20.1%, followed by Mississippi with a 3.4% slide and South Dakota with a 1.0% decline.
Land-Based Casinos Quarterly Performance
The $12.27 billion haul from slots and table games in Q3 marked a 1.8% increase from Q3 2021. And in September, land-based casino revenue recorded the fastest growth at 4.2% since April, showcasing a strong demand for the in-person gaming experience.
In addition, the growth rates in slot and table games revenue are almost at par after a year of table game revenue growth exceeding slots significantly. Proceeds from table games hit $2.55 billion in Q3, up by 2.4%, whereas slot machine revenue increased by 1.7% to $8.84 billion year over year. AGA noted that the slot and table games data does not capture figures from Michigan and Louisiana; however, their aggregates have been included in the combined nationwide figure.
The strong figures experienced in land-based casinos were driven by increased spending from visitors in states that published their admissions figures. For example, based on the admissions data, the quarterly revenue per admission was above the figures recorded pre-covid in Illinois and Louisiana and almost at the pre-pandemic levels in Mississippi, Iowa, and Missouri.
The sturdy growth experienced in the land-based casino revenue in Q3 can also be attributed to the launch of commercial casino gaming in Virginia and Nebraska. In July 2022, Virginia became the 26th state to open a commercial physical casino at Hard Rock Bristol. Likewise, Nebraska became the 27th state to open a land-based casino for slot gaming at WarHorse Casino on September 24, 2022. So, ultimately, revenue collected from land-based table games and slot machines from January to September was $35.94 billion, an 8.1% increase compared to the same period in 2021.
iGaming and Sports Betting Stay Strong
Although land-based gaming represents the largest percentage of the overall commercial gaming revenue, online gaming and sports betting have also shown tremendous growth in Q3 2022.
In Q3, US bettors placed a whopping $15.99 billion on sports, a 40.9% increase from a similar period last year, effectively setting a new quarterly record. Likewise, sports betting revenue in Q3 blew past the previous record best of $1.62 billion set in Q1 2022 and registered an 80.6% increase year-over-year. Meanwhile, sports betting proceeds for markets that bet throughout Q3 2021, which excluded New York and other new markets, saw a 33.33% surge in Q3 2022.
US bettors spent $62.67 billion in wagers for the first nine months of this year. From the indicated volume of wagers, the commercial sports betting revenue hit $4.78 billion, a 71.4% increase for the same period in 2021. Furthermore, for Q3 2022, the sportsbooks’ hold stood at 10.5%, an increase from Q2 at 7.5% and Q1 at 6.6%.
On the other hand, online gaming revenue in Q3 2022 jumped 28.5% compared to the same period in 2021 and below 1% of its Q2 record. Like other commercial gaming segments, online gaming has performed remarkably well, with a $3.62 billion haul for Q3 2022, reflecting a 38.1% year-on-year increase.
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