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Record gambling revenue means more money for most states that sanction bets

Photo by Aidan Howe on Unsplash

U.S. commercial gambling revenue hit a quarterly record of $17.67 billion in first three months of 2024. It marks the gaming industry’s 13th consecutive quarter of growth, according to the American Gaming Association.

And Caitlin Clark hadn’t even played a Women's National Basketball Association (WNBA) game yet. Clark’s WNBA May 14 debut with her Indiana Fever facing the Connecticut Sun drew an average television audience of 2.13 million viewers, making it the most watched WNBA game in almost 23 years.

I’m willing to bet, pun intended, that is also was the most bet on WNBA game ever. Until Clark and the Fever make the league’s playoffs.

The AGA didn’t specifically cite the increased interest in women’s sports as a reason for gaming’s growth. However, the national trade group for the U.S. casino industry group did note that this likely will be a watershed year for gambling.

“While gaming’s momentum remains strong, 2024 will be the new baseline for future growth after several years of sports betting legalization and post-pandemic consumer shifts,” said AGA President and CEO Bill Miller in announcing today (May 16) the latest national gaming data.

Big March boosted quarterly revenue: Overall, commercial gaming revenue growth across the United States slowed in this year’s first quarter, but still expanded by a healthy margin compared to the same period in 2023, according to the AGA Commercial Gaming Revenue Tracker.

The tracker, which compiles data from state regulatory disclosures, shows combined revenue from commercially operated land-based casinos, sports betting, and iGaming increased by 5.6 percent year-over-year, reaching $17.67 billion for the quarter.

It was the 13th consecutive quarter of year-over-year growth and the highest-grossing quarter ever for the U.S. commercial gaming sector, edging out last year’s final quarter tally of $17.64 billion.

March was particularly noteworthy, according to the AGA, with the industry recording its second-highest revenue month ever at $6.09 billion, a 1.8 percent increase compared to the previous year.

Hmmm. What was going on a couple of months ago? Oh, yeah. March Madness, which this year saw more coverage of, you got it, the NCAA Division One women’s collegiate championship tournament.

Clark’s University of Iowa team made it to the finals, where her Hawkeyes lost to the undefeated national champion South Carolina Gamecocks.

This year’s women’s college basketball tourney set viewing records across all six rounds. The Carolina vs. Iowa final delivered 18.9 million viewers on ABC and ESPN, an 89 percent increase from last year’s championship game. It also was more viewers of the women’s championship game than the men’s final.

Again, probably more bets, too.

State gaming stats: The AGA also released its annual State of the States report, which provides state-by-state economic and regulatory analysis of U.S. commercial gaming in 2023.

State of the States 2024 details the record $14.67 billion in direct gaming tax revenue paid to state and local governments by commercial gaming operators in 2023. That’s an increase of 9.7 percent from 2022. Related income, sales, and other taxes are not part of the total.

Thirty of 36 states set annual records for commercial gaming revenue last year, according to the AGA report.

Overall, the report found that commercial gaming revenue nationwide reached a record $66.66 billion in 2023, 10.3 percent higher than 2022.

Much of that, as the AGA graphic below shows, came from online bets. Online gaming made up a record 29.3 percent share of commercial gaming revenue in the first quarter of this year.

AGA US quarterly gaming revenue 2021-2023

Online gaming — comprising iGaming and online sports betting — saw a deceleration in annual revenue gains from 39.6 percent in 2023's fourth quarter to 19.3 percent in quarter 1 of 2024. Nevertheless, the combined revenue from online sports betting and iGaming reached a new quarterly high of $5.16 billion.

What is iGaming?

   In the simplest terms, iGaming is any kind of online betting that wagers on the future outcome of a game or event. Sports betting, online casinos, poker, and eSports all fall under the iGaming definition.

   But iGaming can fall can fall under two definitions, narrow and wide. 

   In a narrow version, iGaming is any form of online betting and gambling activity in a game of chance. Every type of online game of chance operating on the internet can be classified as iGaming, including live casino games, video slots, lotteries, sports betting, and more.

   In a wider sense, iGaming is a large industry of multi-faceted establishments, stretching from businesses that create online casino games to software providers offering operators ready-made casino software solutions, sportsbook platforms, management tools, and more.

Sources: SBD and BetConstruct

Gambling and taxes:
As noted earlier, gambling operations contribute to state treasuries via taxes.

The winners of the games also generally owe tax on their gambling profits.

You can read more about the federal tax requirements of winning bettors in my post Reporting Super Bowl and other gambling winnings on IRS Schedule 1.

You also might find these other gambling-related posts of interest:



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