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US Commercial Gaming Revenue Sets Quarterly Record with $14.8B in Q2 ‘22
By Jeff Osienya Aug 20, 2022 IndustryAccording to AGA’s Commercial Gaming Revenue Tracker, USA’s commercial gaming revenue in Q2 2022 has crushed previous quarterly highs after reaching a whopping $14.8 billion. America’s gaming scene is on track to set a new annual revenue record.The American Gaming Association (AGA), USA’s premier gambling industry trade body, has just released a new report per its Commercial Gaming Revenue Tracker to offer insight into the national gaming scene’s performance. According to the latest AGA report, the American gaming market recorded an all-time quarterly high after collecting $14.81 billion from traditional casino games, iGaming, and sports betting in the second quarter of 2022. This impressive figure is an 8.8% jump compared to the same period in 2021 and has surpassed the previous quarterly high set in Q4 2021 by 3.3%.
If casinos continue to bring in record numbers in revenue, analysts project that the gaming revenue in 2022 may also set a new record and beat the $53 billion collected in 2021. As the financial figures currently stand, USA’s commercial gaming sector has already raked in $29.16 billion worth of revenue for H1 2022. The nationwide sports betting handle is another strong indicator that this year’s performance will blow past last year’s revenue. Sportsbooks have already processed more wagers in H1 2022 than those recorded during the same period in 2021.
Therefore, if the performance is maintained through H2 2022, there would be a significant year-over-year growth that would effectively lead to a new annual record. In addition, the 2021 gaming revenue saw a 21% jump year-over-year from a pandemic-induced decline and was up 13% from the previous all-time high in 2019. So, from the look of things, there’s a strong upward trend as the gaming sector moves into its post-pandemic future.
Shining Performance Also Seen at the State Level
Of course, the record-smashing numbers were not only set at the national level as some states also reported all-time high revenues for the same period. These include Nevada, New York, Massachusetts, Pennsylvania, Iowa, Arkansas, Oklahoma, Oregon, and Maryland. Additionally, 22 of the 31 states with active regulated gambling markets in 2021 reported an overall revenue rise during the quarter.
On the flip side, only a few states reported lower incomes during the first half of this year. For instance, the District of Columbia (described by AGA as a turbulent betting market) is experiencing the most challenging period by recording 26.7% lower revenue than in H1 2021. The other states that saw a drop in the sports wagering handle are Mississippi, South Dakota, and Kansas.
Traditional Casinos Responsible for Most of the Revenue
As has always been the norm, in-person gambling activities on casino floors accounted for most of the revenue generated. Slot machines at brick-and-mortar facilities and table games saw significant growth and even recorded all-time highs as well. The two collectively generated about $12.17 billion, which is 82.2% of the total revenue in Q2 2022.
However, slot machines had a slimmer margin compared to last year as they recorded a 0.2% increase, while table games had an 18.2% growth from 2021. The American Gaming Association has attributed the difference to the rate at which each section has reverted to normal as the pandemic continues to die down.
Sports betting, which is relatively new in most states, also had a considerable growth rate as AGA reported a 63.9% year-over-year increase. Overall, the sports betting vertical contributed $1.42 billion to the GGR, followed closely by $1.21 billion in iGaming revenue.
2022 Had a Fantastic Launch
The US gaming industry has been expanding at an astronomical rate, especially after the hefty blow the pandemic landed. The losses incurred in the first year of the Covid-19 pushed legislators to reconsider previously held stances on online and sports betting, causing over 30 states to legalize one or both genres of gambling.
This move has proved fruitful for the actors and, consequently, the nation – which has been racking in billions in revenue every month. In fact, 2022 began on a high note as US casinos brought in $4.4 billion in January, 20% higher than what was recorded in January 2020 and 30% higher than 2021. This continued a streak that began 11 months earlier, where the states were collectively collecting at least $4 billion each month.
But then, during the three months of Q2, the growth pace was much slower after reporting a 13.1% growth in April, 10.7% in May, and 2.5% in June. By the end of Q2 2022, the industry had been on a 16-month hot streak. AGA analysts have, however, attributed the slowing growth rate to the stabilization of consumer demand. AGA President and CEO Bill Miller voiced his opinion on the release of the commercial gaming revenue report saying:
Quote“Q2’s results mark a 16-month period of gains for commercial gaming. With increasingly difficult year-over-year comparisons, our strength through the first half of 2022 reflects sustained consumer demand for legal options as well as gaming’s record popularity.”
Additionally, Miller expressed optimism for H2 2022 despite the current recession that has been characterized by inflation and challenges for the nation’s workforce. The AGA President and CEO also conveyed his confidence in the high odds of setting an annual record as AGA members were taking steps to keep the numbers high. He also credited the industry’s success to tribal casinos, whose achievements he described as going “well beyond the casino floor to support vibrant communities across the country.”
Tribal Gaming Also Enjoyed Stellar Performance
The Q2 2022 commercial gaming financial report from AGA follows the announcement of the 2021 tribal gaming performance recently released by the National Indian Gaming Commission. So, for the 2021 calendar year, tribal operators garnered $39 billion worth of gaming revenue, which also bested previous annual figures. And from the look of things, 2022 is already experiencing shining performances across tribal gaming facilities countrywide.
Citing the remarkable performance of tribal gaming, Bill Miller said in part:
Quote“Tribal gaming demonstrated its responsible leadership throughout the pandemic, and these record results reflect that commitment. The full recovery and ongoing success of tribal casinos goes well beyond the casino floor to support vibrant communities across the country.”
Bigger Wins Expected in the Future of USA’s Gaming Scene
The current revenue trends are particularly promising, especially given that more states are still looking to expand their regulated gaming markets. Since the 2018 PASPA repeal, for instance, many states have been working on jumping into the initially untapped sports betting market.
Some operators are already investing in sports betting advocacy programs in unregulated markets with the hope of getting ahead of the game as soon as proposed bills are passed into law. An example is DraftKings which has been trying to get its ducks in a row in readiness for the California sports betting industry. The Golden State is expected to launch its legal sports betting market by the 2023 NFL season.
Industry experts have estimated that by 2025, at least 45 states will have passed some form of legislation to legalize sports betting and iGaming. With this in mind, there is a high chance that despite the post-Covid recession, the US betting industry will continue to be bullish for a few more years.
As states continue warming up to the idea of expanding their gaming markets to include sports betting, analysts predict a bright future despite some relatively low figures at the moment. For instance, Goldman has projected that the US online sports betting market will hit a valuation of about $40 billion by 2033.
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