PROVIDING YOU WITH ALL THE BEST BETS
In states where online gambling is legal, operators must adhere to strict regulatory frameworks designed to protect consumers and ensure fair play.
This legal structure not only fosters a safe and transparent gaming environment but also contributes to state revenues through taxation. Projects like Jackpot Sounds play an essential role in promoting awareness of legal online gambling options.
As the industry continues to grow, understanding the legal nuances will be key to navigating the opportunities and challenges of online gambling in the U.S.
The U.S. commercial gaming industry has reached a significant milestone, recording a staggering $17.63 billion in revenue for the second quarter of 2024.
According to the American Gaming Association’s (AGA) Commercial Gaming Revenue Tracker, this marks the 14th consecutive quarter of year-over-year growth, setting a new historical high for Q2 earnings.
Nationwide Growth Across Multiple Sectors
The impressive revenue figures were not confined to a single region or gaming type but were seen across the country, with 24 jurisdictions reporting increases in gaming revenue compared to the previous year.
This widespread growth underpins the industry’s resilience and its ability to adapt to changing consumer preferences. The total commercial gaming revenue significantly bolstered state finances, contributing $3.73 billion in direct state taxes.
Land-Based Casinos Remain Dominant
While the online gaming sector continues to gain ground, traditional land-based casinos still hold the lion’s share of the market.
In Q2 2024, brick-and-mortar venues, including physical sportsbooks, generated 71.4% of the total revenue, highlighting their enduring appeal.
Despite the rise of digital platforms, the brick-and-mortar casino sector recorded a year-over-year revenue increase of 1.8%, amounting to $12.49 billion.
This growth was particularly pronounced in the latter half of the quarter, signaling a potential rebound for the sector.
Online Gaming Growth Slows but Remains Strong
Online gaming saw its growth rate slow in the second quarter of 2024.
The sector accounted for 28.6% of the total gaming revenue, with a growth rate of 32.5% compared to nearly 44% in the same quarter the previous year.
While the deceleration suggests a maturing market, online gaming continues to be a vital component of the industry’s overall expansion, driven by increasing consumer acceptance and the convenience of digital platforms.
Sports Betting on the Rise
One of the standout performers in the gaming industry this quarter was sports betting.
Americans wagered a record $31.75 billion, resulting in $3.16 billion in revenue for the sector, representing a 35.3% increase from the previous year.
This surge was fueled by the launch of new markets in states like
- Kentucky,
- Maine,
- North Carolina, and
- Vermont.
It reflects the growing popularity of sports betting across the country.
iGaming Achieves Record Growth with $1.98 Billion in Revenue
The iGaming sector also posted impressive gains in the second quarter of 2024.
The sector recorded a record $1.98 billion in revenue, marking a 26.1% year-over-year increase.
This significant growth was bolstered by the market debut of iGaming in Rhode Island in March, further expanding the reach and appeal of online gaming across the country.
Commentary from Industry Experts
David Forman, AGA Vice President of Research, highlighted the factors driving the industry’s performance: “While sports betting and iGaming continued to drive overall industry revenue growth in the second quarter, new brick-and-mortar property openings in Illinois, Nebraska, and Virginia also led to rising traditional commercial gaming revenue. Across the country, land-based gaming markets are seeing mixed year-over-year comparisons [...], which may continue to be a factor through the remainder of 2024.”
Economic Influence and Industry Analysis
The AGA’s Commercial Gaming Revenue Tracker serves as a vital tool for understanding the financial health of the U.S. commercial gaming industry.
Offering state-by-state and cumulative insights, this tracker provides a comprehensive analysis based on state revenue reports, covering 37 states and the District of Columbia, all of which had operational commercial gaming markets as of the first quarter of 2024.
Beyond revenue tracking, the AGA assesses the broader economic impact of gaming, examining regulatory frameworks and the geographic distribution of casinos through its State of Play Map.
Distribution of U.S. Gambling Revenue: A Breakdown
In 2024, the U.S. commercial gambling sector generated an unprecedented $17.63 billion in revenue for Q2 alone, and understanding where this money goes provides insight into its broader societal and economic effects.
State and Local Taxes
A significant portion of gambling revenue is directed toward state and local taxes. In the second quarter of 2024, states collected $3.73 billion in direct state taxes from commercial gambling activities.
This revenue is typically allocated to
- public services,
- education,
- infrastructure, and
- public safety.
For instance, in New Jersey, approximately 35% of gambling tax revenue—roughly $400 million annually—is earmarked for senior citizen and disabled residents’ programs.
Similarly, Pennsylvania allocates nearly 40% of its gambling tax revenue, or about $500 million per year, to property tax relief for homeowners.
Regulatory and Compliance Costs
Regulatory bodies receive funding from gambling revenue to ensure the industry operates within legal and ethical boundaries.
In 2024, regulatory oversight accounted for approximately 2–3% of total gambling revenue, translating to around $600 million annually.
This funding supports
- gaming law enforcement,
- controlling over the software developers,
- licensing of operators, and
- monitoring of fair play and consumer protection standards.
Problem Gambling Programs
In 2024, states will allocate an estimated $150 million from gambling revenue to problem gambling prevention and treatment programs.
This represents about 0.5% of total industry revenue but plays a crucial role in supporting
- mental health services,
- helplines, and
- public awareness campaigns.
Economic Development and Community Projects
Many states use a portion of gambling revenue to fund economic development initiatives, particularly in regions where casinos operate.
For example, Nevada channels around 15% of its annual gambling revenue—approximately $1.2 billion—into community development projects, including tourism promotion and infrastructure improvements.
These funds help sustain local economies, especially in areas heavily reliant on tourism and entertainment.
Education Funding
Education is a major beneficiary of gambling revenue in several states.
In Illinois, for instance, 25% of the state’s gambling tax revenue, or roughly $700 million annually, is allocated to the Common School Fund, which supports K-12 education.
Similarly, Michigan directs 30% of its gambling revenue—around $500 million per year—to the School Aid Fund, which benefits public schools statewide.
Health and Welfare Programs
Some states allocate gambling revenue to broader health and welfare programs.
For example, West Virginia directs about 10% of its annual gambling revenue—approximately $100 million—toward Medicaid and other healthcare services, ensuring that vulnerable populations receive necessary medical care.
Infrastructure and Public Safety
A portion of gambling revenue is also invested in infrastructure and public safety.
In states like Ohio, around 20% of gambling revenue, or $300 million annually, is allocated to the Public Safety Fund, which supports law enforcement and emergency services. Infrastructure projects, including
- road maintenance
- public transportation,
- funding, contributing to the overall quality of life in communities where gambling establishments operate.
AGA’s Role in Shaping the Gaming Market
As the national trade group representing the U.S. casino industry, the AGA plays a pivotal role in promoting a regulatory and business environment that supports the growth of legal, regulated gaming.
The AGA’s diverse membership includes commercial and tribal casino operators, sports betting and iGaming entities, and gaming suppliers, all contribute to the dynamic and evolving landscape of the U.S. gaming industry.
The AGA’s efforts to advocate for responsible gaming practices and sound regulatory policies are crucial to ensuring the continued success and sustainability of the industry.
As the commercial gaming sector grows and diversifies, the AGA’s leadership will remain integral to navigating the challenges and opportunities that lie ahead.
The Future Outlook for U.S. Commercial Gaming
As the U.S. commercial gaming industry evolves, the balance between land-based and online gaming will likely remain a key focus.
The robust growth in sports betting and the steady performance of traditional casinos recommend a dynamic and competitive market moving forward.
However, the moderation in online gaming growth could signal the need for innovation and differentiation within the digital space to sustain its momentum.
The continued expansion of legalized gambling in new states will also play a crucial role in shaping the future landscape of the industry.
10-Year Prediction for the U.S. Online Gambling Market Growth
Over the next decade, the U.S. online gambling market is poised for significant expansion, with projections suggesting that it could exceed $100 billion in annual revenue by 2034.
As more states legalize online gambling, the market is expected to grow at a compound annual growth rate (CAGR) of 12–15%, driven by the increasing adoption of digital platforms, mobile technology advancements, and broader consumer acceptance.
State-by-State Expansion
Currently, 30 states and the District of Columbia have legalized some form of online gambling. By 2034, it is anticipated that at least 45 states will have legalized online sports betting, and over 35 states will offer legalized iGaming.
This expansion is expected to increase the number of active online gamblers from 20 million in 2024 to over 50 million by 2034.
Revenue Projections
In 2024, the U.S. online gambling market generated approximately $25 billion in revenue, including sports betting, iGaming, and daily fantasy sports.
By 2034, this figure is expected to quadruple, with iGaming alone projected to contribute $40–50 billion annually.
Sports betting is anticipated to generate an additional $30–35 billion, while emerging sectors like virtual reality (VR) casinos and esports betting could add another $10–15 billion in revenue.
Technological Advancements
The integration of advanced technologies such as artificial intelligence, virtual reality, and blockchain will play a crucial role in the market’s growth.
By 2034, 30% of online gambling revenue will have expected to come from VR casinos, offering immersive experiences that rival traditional brick-and-mortar establishments.
Additionally, AI-driven personalized gaming experiences could enhance user engagement, leading to higher average revenue per user (ARPU), which is predicted to increase from $1,200 in 2024 to $3,000 by 2034.
Economic Impact
The online gambling industry’s growth will have a substantial economic impact, contributing an estimated $20–25 billion annually in state taxes by 2034. This revenue will support various public services, including education, infrastructure, and responsible gambling initiatives.
Additionally, the industry is expected to create over 100,000 new jobs in technology, customer support, and compliance by 2034.
Market Consolidation and Competition
As the market matures, consolidation among operators is likely, leading to the emergence of dominant players controlling 60–70% of the market share by 2034.
Nonetheless, new entrants, particularly in niche segments like esports and VR casinos, will continue to foster competition and innovation.
Final Thoughts
The U.S. commercial gaming industry continues to break records, driven by robust growth across multiple sectors, including traditional land-based casinos, sports betting, and the rapidly expanding iGaming market.
The second quarter of 2024 has proven to be a milestone, with total revenues soaring to $17.63 billion, underscoring the industry’s resilience and adaptability in a dynamic economic landscape.
While traditional brick-and-mortar casinos remain dominant, the rise of online platforms and the increasing popularity of sports betting are reshaping the gaming experience for millions of Americans. The introduction of new markets and continued innovation in digital gaming platforms are expected to fuel further growth in the coming quarters.
As the industry navigates the complexities of state-by-state regulation, projects like Jackpot Sounds contribute to a deeper understanding and appreciation of legal online gambling in the US.
By providing insights and enhancing player engagement, these initiatives play a vital role in the industry’s future.
Looking ahead, the balance between land-based and online gaming, along with the continued expansion of legalized gambling in new states, will define the trajectory of the U.S. commercial gaming industry.
With the AGA at the helm, advocating for responsible gaming practices and supportive regulatory frameworks, the industry is well-positioned to continue its upward momentum, ensuring both economic benefits and a secure gaming environment for all participants.