Legalized gambling has rapidly emerged as one of the fastest-growing sectors within the multi-billion dollar sports industry, fueling a record-breaking growth trajectory.
According to data from PBS, Americans have collectively placed over $220 billion in sports wagers, averaging nearly $45 billion annually.
In Q1 2023, brick-and-mortar casinos (including retail sportsbooks) contributed 75.3 percent out of the total commercial gaming revenue, while iGaming and online sports betting accounted for a record quarterly share of 24.7 percent, amounting to over $4 billion.
This remarkable figure shows no signs of deceleration, with an estimated average annual growth rate (AGR) of over 10 percent in the sports betting market projected until 2029. By then, the industry is expected to achieve a staggering total value of $167.66 billion annually.
A growing gaming industry has been another significant driver of this growth, experiencing an unprecedented 24 consecutive months of expansion. The industry reached a record-breaking $16.60 billion in gross gaming revenue in March, primarily fueled by the surge in sports betting, which boasts an impressive annual growth rate of 70.1 percent.
Sports betting activity follows a seasonal pattern. After the Super Bowl in early February, there is a decline in betting during the winter months. Typically, it gains momentum during March Madness and experiences a significant increase in September with the start of the pro and college football seasons.
The NFL’s dominance in sports betting is also evident, with 81 percent of all mobile gamblers placing at least one bet on the league in October last year. However, gambling numbers tend to decline once the NFL season concludes.
Despite the seasonal fluctuations, the sports betting industry has demonstrated strong year-on-year growth. March marked a new monthly revenue record of $5.90 billion, representing a 10.3 percent annual increase.
Looking at the broader picture, sports betting revenue soared to $2.79 billion, reflecting a remarkable annual growth rate of 70.1 percent. This growth has been fueled by the expansion of legalized gambling to new markets, with Ohio, Massachusetts, and Maryland joining the fold.
Shifting towards digital betting
Digital platforms have become the preferred avenue for sports betting in the U.S., with 24 out of the 33 states offering online betting options. As more states legalize sports betting, the convenience and accessibility of digital betting are poised to make online options the norm.
In the first quarter of 2023, Ohio emerged as the second-largest sports betting market, following New York. Sports betting and iGaming experienced substantial growth during this period, contributing to record-breaking quarterly revenue.
Sports betting alone generated $2.79 billion in revenue, surpassing the previous quarter’s high of $2.61 billion and demonstrating a 70.1 percent year-over-year increase.
This growth resulted from the legalization of sports betting in Ohio and Massachusetts. Ohio, in particular, achieved remarkable success, with $387.3 million in revenue and $2.49 billion in handle during its first quarter of operation.
The popularity of sports betting varies across states, with Nevada leading the pack in gross gaming revenue (GGR), followed by Pennsylvania, New Jersey, New York, Ohio, Michigan, Indiana, Louisiana, Mississippi, and Maryland.
According to the American Gaming Association, Nevada’s GGR surpasses any other state by more than 2.5 times, underscoring its long-standing status as a gambling hub.
Nevada also takes the lead in the number of casinos, with a statewide total of 334, with Clark County alone housing 172 casinos, according to World Atlas. The U.S. boasts over 1,000 active casinos, with Oklahoma, California, Colorado, and South Dakota rounding out the top five states.