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

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

Thursday, May 16, 2024

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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.

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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Today's Tax Tip

10 December tax moves — I love Santa Claus, but even the Jolly Old Elf isn’t magical enough provide the tax solutions you asked for in your letter to him. You’re going to have to make some tax moves this December yourself, like these 10 suggestions. (Dec. 1, 2024)
The 2024 Tax Tips offer ways to file your annual return, along with post-filing advice, important tax news and, of course, ways to cut your current tax year bill. You'll find the monthly assemblages on their own respective pages: January, February, March, April, May, June, July, August, September, October, November and December. Remember, tax tasks and tips don't stop after you file your annual return!

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(the blog title totally makes sense now, right?). Professional journalist. Tax geek.
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Tax Season 2024 Final Push

It's over! The final 2023 tax year extended filing deadline has passed, unless you get more time because your filing due date was extended further by a natural disaster like the three hurricanes that have made landfall in Florida this fall.

For most of us, though, the passage of Oct. 15 means it's time to focus on the tax return we'll file next year. We have until Dec. 31 this year to make moves that will reduce our already accruing 2024 tax bill. The monthly tips and reminders a little further down this column suggest ways to do just that.

Finally, keep an eye on the countdown clock just below. It's keeping track of just how many days are left for us to make these tax moves.
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

Ho 🎅 Ho 🎅 Ho!
December is here!
You better watch out. You better not cry. But you better make some year-end tax moves this December or next April 15 could turn out to be the tax equivalent of Santa Claus putting coal in your stocking.

Click image to hear a musical Santa message from The Boss, Bruce Springsteen.
OK, St. Nick can't deliver a festively wrapped, already prepared tax return for you (unless he's even more magical than I think!) to file next year, but he does have a tax connection.
Santa's tracking of naughty and nice boys and girls basically is the same method that the Internal Revenue Service uses. That's why we all need to be nice, especially to ourselves, in this final month of the year by making some important tax-saving moves. Let's get to it!
Dec. 1: It’s here. The last month of the year, meaning the last 31 days to make tax moves that could shave some off your 2024 tax bill, as well as set up 2025 as another saving, and easy, tax year. You could make things even easier on yourself if you opt next filing season to turn over your taxes to a professional. The key is picking the perfect tax pro for your filing (and more) needs. And you need to start your search now, as the good tax pros’ client lists fill up fast. If you can hire one soon, there’s a December bonus. You might get some year-end tax tips!

Dec. 4: In the meantime, check out these 10 tax moves to make in December. They could be the perfect tax present to give yourself.

Dec. 10: Do you work as a server at a restaurant or at any other establishment where gratuities from customers are part of your compensation? I hope you get all the tips you deserve for doing your job well. Remember, though, that those tips are taxable income.

Whether you're dining at your favorite eatery or getting food delivered to your home, if a tip isn't included on your restaurant or delivery bill, click the image above to calculate how much to tip the person who brought it to you.

And if you got at least $20 in gratuities in November for your extraordinary services as a food server or hair stylist or parking valet or whatever job where tipping is common, you must report that amount by today. Use Form 4070 to let your employer know the total tips you took in last month.

Dec. 13: It’s the holiday season, full of joy and peace and goodwill toward all. So what the heck is a Friday the 13thh doing in December? Don’t worry, as least not about tax fears and superstitions. Check out the tax truth about these 13 tax misperceptions. They’ll help get you through today and help you be a fearless taxpayer year-round.

Dec. 15: Christmas is just 10 days away! If you're still shopping for gifts, you're probably searching for the perfect present online. But beware and be wary. Internet crooks also are logged on, looking to steal your money and identity. Many of the holiday scams use the same techniques as tax scammers employ. Any personal information they get now can be used at tax time to file a fake return in your name and claim a fraudulent refund. So be careful out there, now and next filing season, and, well, unfortunately all the time.

Dec. 19: Are you taking on multiple gig jobs to make some extra holiday cash to pay for all those online orders? Those added side hustles mean you're an independent contractor. And that means you're responsible for paying income taxes due on the money, as well as any self-employment tax. In most cases, that means paying estimated tax on these end-of-year earnings by Jan. 15, 2025, to avoid a possible penalty for not paying as you earned the money.

Dec. 23: It's Christmas Week! That means holiday treats, final decorations — or first, if you wait until the very end to get a tree — and frantic last-minute shopping! Rather than worry about how you'll get the perfect gift under the tree on time, consider instead giving some easy tax-favored presents. Open a Roth IRA for your child or grandchild who earned some money this year. Or pay tuition by Dec. 31 for classes that will start in the first quarter of 2025.

Dec. 24: Christmas Eve!
No taxes tonight. It's early to bed for kiddies of all ages. Santa's on his way!

Click image to watch NORAD track Santa's Christmas Eve delivery route.

Dec. 25: Merry Christmas! My gift to you is another day without tax thoughts.
Just enjoy the holiday and your family and friends.

Dec. 26: Happy Boxing Day. This unofficial holiday on St. Stephen's Day is celebrated by additional giving.
If you donate to your favorite charity on this Boxing Day or any other day by Dec. 31, on your 2023 taxes you'll have to itemize your gifts on Schedule A to claim them. If you don’t have enough expenses to exceed your standard deduction amount this tax year, consider delaying your charitable contributions until early January as part of a tax deduction bunching strategy.

Dec. 31: This is it. The drop-dead deadline to make most 2024 tax moves. A quick and easy action today is to zero out your medical flexible spending account (FSA) by buying over-the-counter medications for which the funds can be used. This is especially important if your employer doesn't offer a grace period to use the money or let you roll some FSA money over into 2025. Without those alternatives, you'll lose any FSA funds you don't use.

Done? Great! Make sure the champagne is chilling and settle in for your New Year's Eve party or a cozy night at home with your friends and loved ones. Either way, cheers and Auld Lang Syne as the ball drops at midnight.

Small Business Tax Calendar: Important filing, deposit and record keeping dates throughout the year that your company needs to know. You can get more tax calendar information at the IRS' online calendar page and view the full year's important business and individual tax dates in IRS Pub. 509.

State Tax Help

Don't forget your state taxes!
Forty-three states and D.C. collect personal income taxes. But even if you live in of the seven states without an income levy, you still face other state (and local) taxes.

State Tax Departments provides links to your state's Web page. The companion page, Tax Tidbits, is the compilation of blurbs about each state's tax laws. And for more state tax news, check out all our state tax bloggings.

Tax Forms

Thanks to our increased use of tax preparers and computer software, many of us don't see our tax forms until we sign and file them. But knowing what's on these documents, either in paper or digital form, and why the IRS wants it is key to understanding our tax system. And knowledge definitely is power, especially when it comes to tax savings. Find this valuable information in the ol' blog's special Tax Forms 2024 page.

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