Revenue from legal sports betting in the US reached a historic milestone in 2023, representing a period of exponential growth for the industry.
Although the impressive numbers reflect an upward trend, the pace of expansion could face obstacles in 2024 if new states do not adopt the practice.
According to the American Gaming Association’s Commercial Gaming Revenue Tracker, North Americans bet a record $119.84 billion in 2023. Thus, representing a significant increase of 27.5% compared to the previous year.
This massive betting volume translated into revenues of 10.92 billion dollars, registering a notable jump of 44.5% compared to 2022.
The national retention rate, which indicates the percentage of money retained by bookmakers, also saw an increase, reaching 9.1% in 2023.
Presence of legalized sports betting in the USA
The legal presence of sports betting has expanded to 38 states and the District of Columbia, fueling the industry’s growth.
The entry into operation of five new states in 2023, Kentucky, Maine, Massachusetts, Nebraska and Ohio, contributed to this growth.
This is because the new regions combined generated revenue of 1.49 billion dollars last year.
The meteoric rise of legal sports betting continued until the end of 2023, with the fourth quarter recording an impressive $40.02 billion in betting volume and total revenue of $3.41 billion.
This period saw strong attendance at sporting events such as the NFL, college football, MLB, and the start of the NBA and NHL seasons.
Outlook for 2024
The first quarter of 2024 presented a promising scenario for the industry, with estimates that Americans bet around 23.1 billion dollars on Super Bowl LVIII.
Additionally, North Carolina is expected to begin online sports betting soon, taking advantage of the ‘March Madness’ college basketball tournament.
However, despite initial optimism, 2024 will face challenges in maintaining the impressive pace of growth seen in the previous year.
Uncertainty looms over how many new states will adopt legal sports betting, with some facing political challenges in the process.
Chris Cylke, AGA senior vice president of government relations, highlighted, “Some of them have pretty significant policy challenges in terms of getting sports betting enacted.
When we look at the map, there could potentially be two or three states that have some activity and cross the finish line this year. There could be zero, which would be disappointing, but that’s where we are now with the progress we’ve made over the last almost six years.”
Alabama, Georgia and Missouri are mentioned as states that could see legislative movement this year, although there is no guarantee of their joining the sports betting market.
Evolution of the sports betting market: trends and projections
In the absence of significant new state additions, growth in 2024 and 2025 is expected to come from activity in already established jurisdictions.
David Forman, vice president of research at the AGA, highlighted the notable gains made by states like New Jersey and Illinois, which have seen substantial increases in sports betting revenue in recent years.
The legal sports betting market will continue to attract bettors from illegal locations and new customers, driving the sector’s growth.
In 2023, states such as New York, New Jersey and Illinois led the way in terms of revenue, demonstrating the market’s profitable potential.
In addition to sports betting, the US commercial gaming industry as a whole achieved a new revenue record in 2023, exceeding expectations.
With each sector recording exceptional performance, total revenue from land-based casino games, sports betting and iGaming reached $66.52 billion, marking a 10% gain from the previous year.
The outlook for the future is equally promising, with total annual US gaming revenue projected to approach $110 billion.
