The NFL preseason got underway in August. That means the fall betting season has begun, and what’s good for online sportsbooks tends to be good for online casinos too.
Sure enough, gross gaming revenue for online poker rooms and casinos shot up in almost every state. Combined iGaming revenue for the six states with legal online casino gaming amounted to about $427 million in August, compared to $418 million in July, an increase of about 2%. Though small, that gain shows us that the summer slump is over. If past years are any indication, the industry should perform much better over the coming months than it has for the last few.
New Jersey was the only exception to the recovery. Its monthly revenue fell almost 4%. Conversely, Pennsylvania, which had been faring the worst of the big states, had the best month in August. One interesting consequence of that is that those two states and Michigan are now virtually tied for monthly revenue.
Historically, New Jersey has been the top dog for US iGaming but its days are probably numbered. Pennsylvania already had its turn in the number one spot from March through May this year. Michigan, as the youngest member of the group, has been showing the strongest year-over-year improvement (34.7% for August). That being the case, it’s likely that it, too, will top the charts for at least one month before the year is out.
Table Games Take Off in Pennsylvania
Pennsylvania’s unique among the online gambling states in that it taxes slots for real money at a different – and much higher – tax rate than table games. As a result, the Pennsylvania Gaming Control Board reports revenue for the two types of games separately.
One observation we can make from that data is that table games seem to be a bigger driver of seasonality than slots. Monthly growth in slots revenue does tend to slow down or go slightly negative in the summer months. However, the “summer slump” is much more visible when it comes to table games growth, with negative growth in the double-digit percentages in the middle of the off-season.
What’s more, that slump has ended very abruptly and dramatically the past two years. In Sep 2021, daily average table game revenue spiked over 40%. The increase this August was 20%. Though smaller, it’s also earlier, so we may end up seeing similar gains this year, just split over two months. (We don’t see the same phenomenon in earlier years, but that’s because sports were disrupted by the pandemic in 2020, while the market had just opened in fall 2019).
It’s probably no coincidence that the timing of this spike coincides with the return of NFL football. That’s when sports bettors are mostly likely to make a deposit after some time away. Moreover, there’s evidence that players crossing over from sportsbook to casino are more inclined towards table games (probably blackjack, mostly) than the average casino user. Looking at the slots-to-tables revenue breakdown for operators, those with more sports focus show a higher percentage coming from tables. For instance, FanDuel Casino has made only 54% of its all-time gross revenue from slots, compared to 73% for the state as a whole, and 87% for Parx.
Pennsylvania Online Gambling Revenue – Aug 2022
Pennsylvania online casinos struggled a bit more than those in New Jersey and Michigan in the early part of the summer. From May to July, their daily average gross gaming revenue (DAGGR) was dropping over 4% monthly.
The Keystone State has rebounded strongly in August, however. Monthly revenue increased almost 7%, from $123.2 million to $131.7 million. Table games were obviously a big part of that.
Compared to other states, there was relatively little change in market share. The Penn National license, which hosts several major brands including DraftKings and BetMGM, saw a gain of 12%. No other license did better than that, but most were slightly in the black. PlayLive! stands out as having a weak month, down 5.9%.
New Jersey Online Gambling Revenue – Aug 2022
New Jersey was the only state to see online gambling revenue decline in August. It fell from $136.7 million in July to $131.4 million. Revenues for NJ online poker rooms and NJ online casinos both dropped by similar percentages, between 3% and 4%.
That said, most of the state’s licenses saw an increase. Two of the three licenses with online poker sites were down: Borgata (BetMGM Poker) and Caesars (WSOP). Resorts (PokerStars) lost out in poker revenue but stayed barely in the black thanks to a small increase in casino revenue.
Caesars had by far the worst month of any license, down 15% for poker revenue and 19% for casino. This comes after a tremendous July, in which it saw daily average revenue jump 13%. Borgata and Resorts also had a good July, though not quite as good.
Putting all this together, it looks as if the summer’s World Series of Poker and its online bracelet events at WSOP.com brought a lot of New Jersey poker players to the online tables. That, in turn, benefited the associated online casinos. What we see in August is perhaps not so much a downturn so much as a return to normal after a period of intense activity.
All three sites are gearing up for big tournament series in the fall, so their numbers may start creeping up once more.
Michigan Online Gambling Revenue – Aug 2022
Michigan has been the best and most consistent performer of the big three states this year. Its year-over-year increase in monthly revenue has remained above 30% throughout 2022. That’s why it’s now in contention to become the biggest state for online casino revenue before the year’s out.
$130.9 million in total iGaming revenue for August represents a 3.4% increase from July. It also brought the Wolverine State past the $1 billion mark year-to-date.
Somewhat surprisingly, casino-centric brands did better in August than sports-first ones. That will probably change in September now that the NFL regular season is underway.
The tribal operators Eagle Casino and FireKeepers both saw revenue jump nearly 30%. Eagle, a latecomer to the market, has been creeping up in terms of market share. It’s close to becoming the biggest Michigan tribal brand for online casino and could soon start challenging brands like WynnBet.
Golden Nugget did the best among national brands, up 17%, followed by PokerStars, up 14%.
Connecticut Online Gambling Revenue – Aug 2022
Total online casino revenue in Connecticut increased 6.2% in August. At $22.1 million, it’s still a little below the all-time high of $22.8 million in April, but should start setting state records as we move into the fall.
The Mohegan/FanDuel partnership had the better end of things, up 8.9%. On the other hand, DraftKings still increased its revenue 4.5% despite cutting its promotional spending by 21%. With the Mohegan gains, the market now sits at a 60/40 split in favor of DraftKings. However, it still outspends Mohegan more than 10-1 on marketing, so the question remains whether it will be able to hold on to the lead as it dials back that spending.
West Virginia Online Gambling Revenue – Aug 2022
West Virginia has been on a tear this year. Even in per capita terms, it has always been a weaker performer than the big states. However, it is also the fastest-growing.
Revenue for August was $9.6 million, up 8.5% from July. That’s especially impressive considering how good July was, up 15% over June, calculated as a daily average. In per capita terms, that means it’s rapidly closing in on Connecticut. Both are well behind the Big Three states, but anyone writing off West Virginia as unimportant may have been premature in doing so. Its annual growth is now 84%, helped no doubt by the arrival of live dealer casino games, which launched in June courtesy of Evolution.
Delaware Online Casino Revenue – Aug 2022
Delaware’s lottery-operated online casinos had a relatively quiet month. Revenue rose to nearly $1.3 million, an increase of about 3.5% from July.
Of note here is that, like Pennsylvania, Delaware provides a breakdown of table games versus video lottery products. Table games revenue jumped 34% in August while video lottery play actually declined slightly. This corroborates the trend we observed, of the start of NFL season bringing an influx of table games players, presumably crossing over from the sportsbooks.
State Totals and Growth Rates
| State | GGR - August 2022 | Monthly Change | Annual Change |
|---|---|---|---|
| Pennsylvania | $131,702,439 | +6.9% | +27.6% |
| New Jersey | $131,438,183 | -3.9% | +16.1% |
| Michigan | $130,924,194 | +3.4% | +34.7% |
| Connecticut | $22,098,292 | +6.2% | N/A |
| West Virginia | $9,606,571 | +8.5% | +84.0% |
| Delaware | $1,296,973 | +3.5% | +37.2% |
Notes
- Where possible, 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.
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