US Sports Betting Passes $100 Billion Mark For 2023

Sports betting in the United States has experienced huge growth in recent years, surpassing significant milestones and setting new records. The legal commercial betting segment in the US celebrated its fifth year by exceeding $100 billion in FY2023. This achievement was fuelled by substantial year-on-year (YoY) spikes in the first three quarters of the year, with Pennsylvania emerging as a key contributor with a record-high volume of over $934 million in November.

Before 2023, online and retail sports betting was legal in 32 states across the US. However, this year saw an additional five states join the roster, bringing the total number of legalized jurisdictions to 37. The betting markets in Ohio and Massachusetts performed exceptionally well, playing a vital role in propelling the nation’s betting handle to over $100 billion by the end of the year. The betting activity has been steadily increasing, with $79 billion wagered in the first three quarters of 2023.

Last year, the annual wagering handle reached $93.79 million, solidifying sports betting as one of the fastest-growing gambling segments in the country. In 2022, the Gross Gaming Revenue (GGR) reached $60.42 billion, a remarkable 14% increase compared to the previous year. While slots remained the largest segment in the US, sports betting demonstrated the most promising growth, with a YoY increase of 72.7%, generating $7.5 billion in revenue in 2022.

The fourth quarter of FY2023 is projected to continue the trend of year-on-year and quarter-on-quarter growth in the sports betting segment. Currently, sports betting is legal in 38 states and Washington, DC. Vermont is the latest jurisdiction to legalize sports betting, with plans for its market to go live in 2024. However, the legalization of sports betting in California is facing opposition from tribes and requires additional efforts to gain approval.

Despite the challenges in California, the sports betting segment has performed exceptionally well. In Q1 2023, the sports betting GGR reached $2.8 billion, marking an impressive 70.1% YoY increase and surpassing table games to become the second-largest segment, trailing only slots. The growth continued in Q2 2023, with a 56.6% YoY increase, resulting in a GGR of $2.3 billion. Sports betting remained the fastest-growing segment, outpacing iGaming, which saw a 22.5% increase in the same quarter. Comparing the first half of 2023 to the corresponding period in the previous year, the sports betting GGR increased by 65.5%, accumulating $5.15 billion.

The third quarter of 2023 showcased continued robust growth in the sports betting segment. With regulated jurisdictions contributing $2.23 billion in GGR, sports betting experienced a significant 27.7% YoY increase. The majority of the revenue was generated through online channels, indicating a shift towards digital platforms in the betting and gambling industry. This shift was evident in the iGaming segment as well, which experienced a 26% increase, accumulating $1.52 billion in GGR.

The total GGR for the first nine months of 2023 reached $48.78 billion, with slots remaining the largest segment, contributing $26.7 billion and experiencing a 3.8% YoY increase. Table games also saw growth, with a 2.3% increase in GGR, reaching $7.6 billion. Sports betting contributed $7.2 billion to the aggregate, marking a remarkable 53% growth, while iGaming GGR reached $4.49 billion after a 23.8% spike.

Based on state regulatory disclosures compiled by the American Gaming Association (AGA), the third quarter of 2023 generated $16.26 billion in revenue across all legal gambling segments. This strong performance brings the total GGR for the nine-month period between January and September 2023 to $48.78 billion, just $11.64 billion shy of the annual GGR of FY2022.

On average, legal gambling operators in the US have generated over $16 billion in consolidated revenues each quarter in 2023. With this trend, it is expected that the fourth quarter will also contribute significantly to another record-breaking year for the gambling industry in the US. Considering the GGR growth pattern of FY2022, legal gambling operators in the US must accumulate well over $16 billion in revenue in the final quarter.

The steady increase in GGR has also benefited state and local governments, with gaming taxes generating a staggering $3.42 billion in the third quarter of 2023. This revenue boost provides additional resources for public services and infrastructure development.

Traditionally, sports betting activity tends to slow down towards the end of the year in regulated gambling jurisdictions worldwide. However, in Q3 2023, the sports betting segment demonstrated an impressive 27.7% increase, accumulating $2.23 billion in GGR. This growth was primarily driven by legal sportsbook operators in Maryland, Massachusetts, Nebraska, and Ohio.

While Maryland introduced traditional sports betting in December 2021, the online sportsbook segment was launched in 2023. Similarly, Massachusetts and Nebraska went live with their retail betting markets in the same year. Ohio also joined the retail and online betting bandwagon, further contributing to the overall growth of the sports betting segment. Collectively, these four new markets generated a total of $358.7 million in GGR.