State regulators have recently posted their gross gaming revenue figures for H1 2023, providing insight into the positive performance of the U.S. online casino market.
The combined online casino revenue from six states with regulated iGaming markets— New Jersey, Delaware, West Virginia, Connecticut, Michigan, and Pennsylvania — reached $3.14 billion in the first half of 2023. This figure puts the U.S. online casino industry on track to exceed the $5.02 billion annual revenue reported last year.
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June Revenue Exceeds Projections
The market experienced a slow start in January, but recent months have seen revenue exceed expectations in the iGaming sector. Data released by state regulators highlight June as the first month in 2023 in which actual gaming revenue beat projections, with the six active states reporting $151 million in combined gross earnings for the month.
The monthly revenue exceeded the May total by half a million dollars despite June being one day shorter, with a 3.6% month-over-month rise in daily average income versus declines in previous years.
The upward gross gaming revenue growth, especially in June, puts the U.S. online casino market on course to approach the $6.5 billion annual revenue projection set by industry analysts earlier this year. Their forecast assumed continued growth through H1 2023, followed by a typical summer slowdown.
Although the slowdown came earlier in January, recent monthly performances have been more in line with projections, signaling a marked recovery may be underway. The positive outlook was witnessed in June across the entire U.S. iGaming market.
New Jersey Still the iGaming Market Leader
New Jersey has been the industry leader in terms of gaming activity, market share, and revenue since it became the first state to offer legal online casinos in 2013. While its June 2023 figures came in 1.4% below projections, gross gaming revenue still grew 12.1% to reach $149.3 million.
It’s the third-highest monthly total generated by New Jersey online casinos. However, June’s annual growth rate was the slowest since February, when it briefly sank below the ten-percent threshold. In April 2023, New Jersey gambling sites recorded their second-best month with $158.9 million, pushing the state’s lifetime revenue to $6 Billion.
New Jersey’s daily average revenue in June was just under $5.0 million, down 4.4% from May and 1.4% short of analyst forecasts. This made New Jersey the only state to come below expectations in the month. However, the total gross gaming revenue from January through June is $942.1 million.
Borgata Online Casino, BetMGM NJ, PartyCasino, and other online casinos that operate under Borgata Atlantic City’s iGaming license brought in a combined $39,419,707. Golden Nugget Atlantic City accounted for the most significant portion, generating a total of $41,766,499 from online slots and table games in New Jersey.
The internet-only gaming operator Caesars Interactive Entertainment won more than $9 million from N.J. bettors, down 3.6%. New Jersey sportsbooks, including market leaders DraftKings, FanDuel, and Caesars Sportsbook, are also experiencing a growth spurt, with over $591 million in sports handle in June, according to ABC News.
Michigan and Pennsylvania are also on Track
New Jersey, Pennsylvania, and Michigan — the three largest online gambling markets in the U.S. — were all within 3% of projections for H1 2023. Pennsylvania saw the widest margin of outperformance in June at 2.4% above forecast.
According to data from the Pennsylvania Gaming Control Board, the casino sites in the state won $135,436,692 from online gamblers in June. That marks a 31.59% year-over-year increase and a 27.9% jump from May. At $5.5 million, the daily average revenue remained unchanged from May.
Michigan online casinos recorded the fastest revenue growth rate of 24.3% since March, reaching $151 million in June. Their average revenue grew 3.6%, at par with analysts’ projections, to reach $5 million daily. That makes New Jersey the only state of the three underperform at 1.4% below projected revenue.
Connecticut Continues Impressive Growth
Among smaller markets, Connecticut remains the biggest success story of 2023, with over 50% annual growth in June. The online casinos in the Nutmeg State generated $31.6 million in June 2023, marking a 50.50% increase year over year. The June earnings bring the state’s year-to-date total gross gaming revenue to $176.3 million.
While Connecticut’s revenue exceeded forecasts by 16.3%, West Virginia and Delaware have underwhelmed, with the Diamond State experiencing a slight growth of 2.4% to reach $1.1 million in June. West Virginia is showing signs of recovery, with 61.4% annual growth to reach $12 million in June.
Operator Outlook in H1 2023
Through the first half of 2023, the major online casino operators in the U.S. iGaming market posted mixed results, but the overall outlook is positive. BetMGM, the market leader and joint venture between Britain’s Entain Plc. and MGM Resorts International, Inc., beat its annual gaming revenue forecasts last year.
BetMGM’s annual gaming revenue for 2022 was $1.44 billion, better than its own forecast of $1.3 billion. Based on robust earnings data for the first quarter of 2023, the iGaming firm is on course to achieve its gaming revenue goal of $1.8 to $2 billion. Moreover, the joint owners Entain and MGM Resorts plan to invest an extra $150 million into BetMGM, which is expected to turn a profit in H2, as reported by Reuters.
Market leader BetMGM grew daily revenue by 7.3% in Pennsylvania, while Caesars gained over a percentage point in New Jersey on solid online poker performance. In Connecticut, promotional spending was nearly even for the first time between Mohegan and DraftKings, closing the gap in their market shares.
Wrap-Up: Slow Start but Recovery Underway
While the U.S. online gambling industry got off to a slower-than-expected start in 2023, recent months have shown that recovery is underway. If momentum continues into the second half, full-year revenue may approach or reach the $6.5 billion forecasted total. Further growth will depend on smaller markets like West Virginia catching up and the sustainability of success stories like Connecticut’s impressive expansion.
