The year’s final quarter has traditionally been a good one for online casino revenue. So far, it looks like Q4 2022 will be no exception.
Regulators released their October online gambling revenue figures late last week. The four largest online casino states – New Jersey, Pennsylvania, Michigan and Connecticut – each posted all-time records for daily average revenue. Only the tiny markets of West Virginia and Delaware failed to do so.
Online casino and poker sites in the six states generated a total of $479 million in gross gaming revenue (GGR). That, too, is a record, up from $440 million in September.
At the same time, Pennsylvania’s monthly total crossed another important milestone. It wasn’t too long ago that the Big Three states (NJ, PA, MI) were crossing the $100 million mark for the first time. In October, Pennsylvania became the first of the three to surpass $150 million. New Jersey is almost certain to follow suit before the end of the year, and Michigan may well do so as well.
Fall is the Time for Setting Records
Before 2022, the Big Three states were setting records with such regularity that it was scarcely worth reporting. In fact, there was a period where any drop in revenue was more noteworthy.
In 2020, the COVID-19 pandemic shut down the retail gambling industry and introduced new players to online gambling. That year, all three states were setting records almost every month.
Even in 2021, organic growth was strong enough for those states to set records more often than not. New Jersey and Michigan each set seven monthly records last year, while Pennsylvania set six.
Summer is always a slower period for online casinos than the other seasons, so it’s not surprising that there has been a drought. However, it started earlier this year and lasted longer. In the past, organic growth was strong enough to make the summer slump more of a plateau. As markets mature, it’s now a more distinct downturn.
As a result, only Pennsylvania is on course to beat 2021 in terms of the number of records set. Assuming it continues to surpass itself in November and December, it will have set seven in 2022. However, the best New Jersey and Michigan can hope for is five apiece.
Performance for all three states is remarkably similar now. Pennsylvania leads the way with $4,894,065 in daily average revenue in October, followed by New Jersey with $4,747,637 and Michigan with $4,546,975. For a time in the spring, it looked like all three states would have a turn to be number one within 2022, but it now seems more likely that Michigan will remain in third place for the remainder of the year, while Pennsylvania and New Jersey duke it out for the top spot.
New Jersey Online Gambling Revenue – Oct 2022
New Jersey online casinos and poker rooms generated $147.2 million in gross revenue in October. Using the daily average to account for the extra day in the month, that’s a month-on-month gain of 5.3%. In October 2021, the state total was $127 million, so we’re currently looking at 15.9% annual growth.
Up top, the race for market leadership is getting tighter once again. Borgata, the top dog (thanks mainly to BetMGM), lost 3.5%. That allowed former leader Golden Nugget to catch up with an increase of 8.7%, but Resorts (including both DraftKings and PokerStars) did even better, gaining 11.3%.
As a result, Resorts pulled ahead of Golden Nugget, but by a margin of less than $40,000. Both trail Borgata by a little less than $7 million, or 17%.
Pennsylvania Online Gambling Revenue – Oct 2022
Pennsylvania online casinos comfortably crossed the $150 million milestone, putting up a total of $151.7 million. That’s a 5.1% month-over-month increase in the daily average. Its yearly growth is nearly twice New Jersey’s at 29.6%, which is why it has become the largest iGaming state.
FanDuel Casino (and its secondary brand, Stardust) has been on a tear in the Keystone State. Its daily average revenue grew 16.9% in October, following up on a 21.9% increase in September. It has increased its market share from 14.5% to 17.9% in just two months. The Valley Forge license, which hosts FanDuel, has also crossed $500 million in all-time revenue, despite a late start and having only a single operator.
For comparison, BetMGM and DraftKings are on the same license, along with several smaller operators. That license (Hollywood) has a 42.4% market share. It’s impossible to know exactly how that breaks down, but it’s clear that FanDuel is a top three operator in Pennsylvania, as it is in Michigan.
Most other licenses saw modest increases in October. The main exception was PokerStars (on the Mount Airy license), down 13.6%. (TwinSpires saw an even larger decline, but that’s to be expected as it is winding down its operations and will close up shop before the end of the year.)
Michigan Online Gambling Revenue – Oct 2022
Michigan online casinos trail the other states by about $10 million, having posted $141.0 million in aggregate revenue for October. The Wolverine State had the best performance of the three in monthly growth, up 6.0%. However, its annual growth rate remains below Pennsylvania’s at 28.5%, which makes it unlikely to catch up in the next few months.
Market shares in Michigan have been remarkably stable throughout its nearly two-year history. BetMGM has always been the market leader, and it currently holds 37.1% of the market. FanDuel and DraftKings have been in a tight race and now have 16.3% and 16.1%, respectively, for a combined 32.4%. That leaves 30.5% for all other operators together.
That sort of split has been typical all along. BetMGM has always had a bit more than a third of the market, with the daily fantasy sports companies combining for another third and the other dozen brands splitting the remaining third.
West Virginia Online Gambling Revenue – Oct 2022
Although West Virginia online casinos failed to set a new daily average revenue record in October, they may have increased the monthly total slightly. The Mountain State reports revenue weekly, not monthly, but Bonus estimates a total of $10.73 million for October and $10.68 million for September. As a daily average, that represents a drop of 2.8% due to the extra day in October.
The drop would have been more dramatic, if not for the smallest of the three licenses having a great month. Mountaineer, which hosts BetRivers and Caesars, saw daily average revenue increase by 41.7%. However, Charles Town dropped 6.0%, and Greenbrier lost 8.8%.
West Virginia remains the fastest-growing US market, up 51.4% year-over-year. It has also become a more closely-contested one in that time. In October 2021, Greenbrier had a nearly 55% market share, while Mountaineer had just 11%. Mountaineer now holds 14%, while Greenbrier has slipped to 48%.
DraftKings is likely the largest operator in the state. It’s on the Charles Town license, which holds 38% of the market, but shares that with only PointBet, which is presumably small. Conversely, Greenbrier’s share is split between BetMGM and FanDuel, making it likely that neither has much more than 25% individually.
Connecticut Online Gambling Revenue – Oct 2022
Connecticut online casinos turned one year old in October.
The state’s two operators showed a combined 7.3% month-on-month growth in daily average revenue, beating even Michigan. At $26.9 million total, they generated nearly three times as much as they did in October 2021. However, that was only a partial month.
A better point of comparison would be November 2021, when the two made $18.4 million. Assuming another increase of around 7% from October to November, we can estimate a preliminary annual growth rate of approximately 56% for the Connecticut market. That’s very close to what Michigan’s growth rate looked like one year in.
Delaware Online Gambling Revenue – Oct 2022
Delaware was the only state of the six to see total monthly revenue decrease in October. Its three lottery-operated online casinos generated $1.20 million for the month, down from $1.31 million.
State Totals and Growth Rates
|State||GGR - September 2022||Monthly Change||Annual Change|
- The monthly change in revenue reflects the daily average (DAGGR) to account for the differing length of months. For October, being a day longer than September, this means a downward adjustment of about 3.3% compared to the change in monthly totals.
- Connecticut’s annual change is likewise calculated on a daily average basis, using Oct 12 as the launch date. However, the first week of operations was a soft launch period with limited players, so the actual annual growth rate will be lower once we compare full months.
- Where possible, dollar figures represent gross gaming revenue (GGR) without promotional deductions. However, Pennsylvania provides only adjusted revenue for table games and poker; PA numbers are, therefore, gross slots revenue plus adjusted revenue for tables and poker.
- West Virginia reports numbers weekly, so the monthly numbers are estimates which assume that revenue for partial weeks is spread evenly between days.