iGaming revenues in the US were strong in Q2. Will they keep surging?

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A report from the American Gaming Association (AGA) indicated that, during the second quarter of the year, iGaming revenues more than doubled compared to the same period in 2020 while they increased exponentially compared to the second quarter of 2019. 

 

Multiple trends have been favoring the growth of iGaming across the United States including the legalization of online casinos and sports betting activities in more states. Moreover, the pandemic prompted gamblers to turn to the internet to satisfy their urge to bet as physical casinos remained closed.

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As a result, iGaming revenues for the three months ended on 30 June landed at $901 million. This figure represented another record for iGaming revenues in America and portraits the speed at which this market is growing across the US territory.

 

Since the second quarter of 2019, a total of 12 states along with the District of Columbia have legalized the commercial sports betting market.

 

Can this uptrend in iGaming and sports betting revenues spill over to the next quarters even if the pandemic tailwind fades?

 

July numbers for iGaming and sports betting came in strong

 

The latest report from AGA released on September 3 showed a 657% advanced in iGaming revenues compared to July 2019 and a 114% leap compared to the same month a year ago. 

 

Meanwhile, when compared to the year-to-date figures of the two preceding years, the advance was even more pronounced as the top-line results of iGaming providers in the United States jumped 667% compared to 2019 figures and 156% compared to the same period in 2020.

 

Interestingly, the report emphasized that brick-and-mortar casinos in all states have already seen their revenues return to pre-pandemic levels. 

 

However, a light sports calendar for the month led to a drop in sports betting revenues as they declined 33.9% compared to the previous month although still up 169% compared to July 2020’s figures.

 

Both iGaming and sports betting have been accounting for a lower percentage of the country’s total gaming market in the past few quarters as physical casinos have now recovered. However, based on the rate at which both activities are growing, if more states continue to legalize sports betting and iGaming in their jurisdictions chances are that this temporary downtrend will eventually be reversed as online betting is becoming more mainstream.

 

The number of states in which sports betting is now legal has grown to 23 while a law has been enacted in another 8 to regulate the activity and 3 others are currently weighing the possibility of allowing operate legally as well. 

 

New Jersey remains the most important state for online betting activities followed by Nevada, Illinois, Pennsylvania, and Michigan. 

 

“Legal betting has reached its mainstream tipping point, with every sportscast integrating statistics and odds into their commentary”, said Andre Zammit, the head of trading for Tipico – a sports betting platform based in Germany – to reporters from USA Today. 

 

Three platforms currently lead the sports betting market in the United States: FanDuel, DraftKings, BetMGM, and xoslot. These three account for at least 82% of the country’s total sports betting revenues.

 

Moreover, according to a report from the American investment bank Goldman Sachs, the online sports betting market may grow at a rate of 40% per year over the next decade. This increases the odds that the growth we have witnessed in both iGaming and sports betting in recent months – as compiled by AGA – may continue long after the pandemic is over.

 

Moving forward, it would be interesting to see a shift in the relative contribution of these activities to the total gaming revenues produced by operators in the country in a similar way as digital ads overtook traditional adverts in the past decade.

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