In 2024, regulated US online casino and poker platforms are forecasted to generate a remarkable $7.8 billion in revenue, marking a significant 19% growth from the previous year. Leading the charge, Pennsylvania, Michigan, and New Jersey are projected to contribute over $2 billion each to this total. Reflecting on 2023, my initial revenue estimate was around $6.5 billion. While the final tally for December 2023 is still pending, it appears that the actual figure will slightly surpass this estimate, potentially reaching $6.6 billion after adjustments.
This growth rate of approximately 22% for the full year of 2023, slightly higher than my initial 21% prediction, represents a notable decline from the 35% expansion seen in the preceding year. I anticipate that this deceleration trend will continue into 2024 as state markets reach maturity. The quarterly growth rate in 2023 experienced a modest drop, from 23.6% in the first quarter to an expected 20.7% in the fourth quarter. For 2024, I foresee a similar pattern, starting with around 20% growth in the first quarter and gradually slowing to about 17% by year-end.
Before delving into the state-specific analysis, I’d like to highlight an interesting milestone on the horizon for US online wagering.
Total US Online Wagers Projected to Surpass $1 Trillion in Q1
While my focus usually lies on iGaming revenue, the total amount wagered, known as the handle, caught my attention this time. Though handle is a key metric in sports betting analysis, it’s less emphasized in casino gaming, where most regulators don’t report the total wagers for online casinos. However, with an average house win rate of about 3.5%, we can estimate total wagers from gross revenue.
My analysis revealed that online casinos have already accepted over $500 billion in player wagers since their inception. Based on current growth trends, they’re on track to reach the $1 trillion mark by the end of 2025.
Intrigued by this, I collaborated with Eric Ramsey from Legal Sports Report to include online sports betting handles in the calculation. We deduced that combined wagers from online sportsbooks and casinos are set to cross the $1 trillion threshold around late May or early June. We’ll provide a more precise date as this exciting milestone nears.
Will Pennsylvania remain the largest market?
In the competitive arena of US online gaming, Pennsylvania is solidifying its lead, poised to be the first state to exceed $2 billion in annual revenue. This significant milestone might be accompanied by a record $200 million revenue month in December. Meanwhile, New Jersey and Michigan are expected to each report around $1.9 billion for the year. Looking ahead to 2024, Pennsylvania’s market is predicted to expand, potentially outstripping New Jersey by 20% and Michigan by 15%. Michigan is also likely to secure its place as the second-largest market, a position it intermittently held with New Jersey in 2022.
The population sizes of these states play a pivotal role in their long-term market potential. Pennsylvania, with approximately 13 million residents, is expected to lead, followed by Michigan’s 10 million and New Jersey’s 9 million. Pennsylvania’s anticipated revenue for 2024 is $2.56 billion, marking a 21% increase. Michigan’s forecast is a 16% growth to $2.24 billion, while New Jersey is expected to see a 13% rise to $2.18 billion.
Connecticut’s Remarkable Growth and Future Prospects
Connecticut’s online gaming market was a notable performer in 2023, starting the year with a 35% growth rate and then unexpectedly accelerating to a peak of 57% in May. The consistency of this growth, despite a major reduction in promotional spending by DraftKings, was unexpected. West Virginia also showed robust growth, albeit at a decreasing rate. These states, though smaller in market size compared to Pennsylvania, Michigan, and New Jersey, are narrowing the revenue gap thanks to these high growth rates. The performance of smaller states like Rhode Island and Delaware, the latter undergoing operator changes, adds an interesting dimension to the market dynamics.
Connecticut’s 2024 outlook is optimistic, with a projected revenue of $541 million, indicating a 34% increase. This growth trajectory could lead to a $50 million month by the end of 2024, a milestone that larger New Jersey took over six years to achieve. West Virginia, with a 26% growth projection for 2024, might experience its peak revenue months later in the year, deviating from the typical December highs seen in other states.
These forecasts reflect a diverse and evolving online gaming landscape in the US, where market growth is influenced by state populations, operator strategies, and regional market characteristics. The continued expansion and competition among these states offer intriguing insights into the future of the US online gaming industry.
The US online casino landscape is experiencing dynamic growth, with Pennsylvania leading the charge as the largest market. Predictions for 2024 show substantial revenue increases across key states, reflecting the industry’s expanding footprint. Connecticut’s unexpected surge and West Virginia’s steady growth highlight the diverse potential of smaller markets. This evolving scenario underscores the significant impact of state-specific factors and operator strategies on the overall US online gaming industry, promising an exciting future with new milestones and trends.