New Jersey has always been the top-performing online gambling state in per capita terms, but that may be about to change. Michigan online casinos and poker rooms won just under 53 cents per resident per day in February, compared to 55 cents for New Jersey. At current growth rates, the two will be neck-and-neck in March, and Michigan could become the top performer as soon as April.
This comes amidst a good period for the industry generally. Despite a slow start to the year, the US online gambling industry picked up some steam in February.
The six states with legal iGaming produced a combined total of $496.4 million in gross revenue from online poker and casino games. Accounting for the shorter month, that represents a 7.7% increase in daily average gross gaming revenue (DAGGR) compared to January.
That performance is within 1% of the Bonus revenue forecast for the month, a positive sign given that the January total was well below the projection. All six markets saw DAGGR increase, and all but Delaware set a state record.
Data for this article comes from revenue reports released by the relevant gaming regulators every month (or, in West Virginia’s case, weekly).
NJ & MI: a Two-Horse Race for Market Performance
New Jersey is by far the oldest competitive market for online casinos in the US, having launched in 2013. Pennsylvania only opened its market in 2019, followed by West Virginia in 2020, then Michigan and Connecticut in 2021. (Delaware, like New Jersey, began in 2013, but it is a lottery monopoly, not a competitive market).
That head start allowed New Jersey to lead the pack until recently. However, Pennsylvania and Michigan have been growing more quickly. Bonus believes the New Jersey market is much closer to its ceiling than the other states. Its annual growth may soon slow to low single-digit percentages similar to those in the retail gambling sector. Conversely, Michigan and Pennsylvania still have more headroom before they reach full maturity.
Pennsylvania is now the largest market in strict dollar terms and will likely remain so. However, it benefits from having a larger population than the other states.
Similarly, Michigan has been slightly ahead of New Jersey this year in gross revenue. But with only 93% of Michigan’s population, New Jersey remains slightly ahead in per capita revenue for now.
Per Capita Daily Average iGaming Revenue by State – Feb 2023
- New Jersey: $0.55
- Michigan: $0.53
- Pennsylvania: $0.45
- Connecticut: $0.28
- West Virginia: $0.26
- Delaware: $0.04
Although gross revenue is of interest to operators and investors, it can be interesting to adjust that figure for state population if we’re comparing regulatory policy. Pennsylvania trails New Jersey and Michigan on a per capita basis, though it’s still well ahead of smaller states.
The difference likely comes down to Pennsylvania’s 54% tax rate on slots, which may be causing operators to hold back on marketing relative to other states where they can hold on to more of their winnings. Michigan, by contrast, has an online casino tax rate only slightly higher than New Jersey’s.
Moreover, Michigan has been operating smoothly on the regulatory front from the start, and its launch came at a fortuitous time. In January 2021, many Americans were still staying home due to the COVID-19 pandemic and looking for ways to stay entertained.
In combination, these factors may explain why Michigan seems on course to overtake New Jersey as the top-performing state.
PA Online Gambling Revenue Highlights – Feb 2023
- In February, Pennsylvania online casinos and poker rooms produced $162.3 million in gross revenue.
- As a daily average, revenue increased by 12.1% in February, the best performance among the larger states.
- Pennsylvania beat the Bonus forecast for February by 2.1% and now trails the year-to-date forecast by only 0.7%.
- Caesars had an exceptional month, increasing its daily average DAGGR by over 40%.
- TwinSpires shut down at the beginning of February, so its revenue dropped to effectively zero. Later this year, Bet365 is expected to launch in its place on the Presque Isle master license.
- Aside from TwinSpires, Unibet was the only operator with negative monthly growth, dropping 14.3%.
MI Online Gambling Revenue Highlights – Feb 2023
- Michigan online casinos and poker rooms produced $148.2 million in gross revenue in February.
- As a daily average, revenue increased by 6.7% in February, the best single-month performance for the state in the past year.
- Even so, Michigan came up 2.7% short of the Bonus projection for February and trails the year-to-date forecast by 4.3%.
- Market leader BetMGM added only 1.5% to its daily average revenue, while its closest rivals FanDuel and DraftKings, gained 12.8% and 13.4%, respectively. As a result, BetMGM’s market share has slipped to 32.7%, its lowest since March 2021.
- Among smaller operators, PlayGunLake, WynnBet and PointsBet all had very good months, while PokerStars, Barstool, Caesars and Firekeepers had negative revenue growth.
NJ Online Gambling Revenue Highlights – Feb 2023
- New Jersey online casinos and poker rooms produced $142.6 million in gross revenue in February.
- All-time tax revenue (including payments to both the state and Atlantic City) from NJ online casinos has just crossed the $1 billion mark. It’s the second state to reach that milestone, after Pennsylvania.
- The monthly average was $5.1 million, the first time the Garden State has crossed the $5 million mark.
- New Jersey came up 3.5% short of the Bonus projection for February and trails the year-to-date forecast by 4.7%.
- Market-leading license Borgata (including BetMGM) had a good month, up 7.8% to put some distance between itself, Golden Nugget, and Resorts, both of which had been nipping at its heels in January.
CT Online Gambling Revenue Highlights – Feb 2023
- Connecticut’s two online casinos produced $29.1 million in combined gross revenue in February.
- Their combined daily average exceeded $1 million for the first time.
- Connecticut beat the Bonus forecast for February by 2.6% and is now slightly ahead of the year-to-date forecast.
- Despite continuing its strategy of reducing promotional spending, DraftKings saw its market share increase in February to 57.6%.
WV Online Gambling Revenue Highlights – Feb 2023
- West Virginia online casino revenue surged to $13.1 million in February.
- All three license holders in the state saw double-digit percentage gains in daily average revenue, and their combined total rose 23.3%.
- Although still the smallest market aside from Delaware, West Virginia remains the fastest-growing by a wide margin, with a current annual growth rate of 61.2%.
- West Virginia beat the Bonus forecast for February by 3.0% and is behind the year-to-date projection by just 1.2%.
DE Online Gambling Revenue Highlights – Feb 2023
- Delaware’s lottery-operated online casinos brought in $1.12 million in February.
- Daily average revenue for the state increased 4.5% month-over-month, and the annual growth rate rose to 33.2%.
- Even so, Delaware remains well behind projections, 7% below the Bonus forecast for February and 11% behind year-to-date.
US Online Gambling Revenue Summary Table
| State | GGR - Feb 2023 | Monthly Change | Annual Change |
|---|---|---|---|
| Pennsylvania | $162,310,932 | +12.1% | +31.2% |
| Michigan | $148,168,864 | +6.7% | +20.7% |
| New Jersey | $142,592,966 | +3.3% | +9.7% |
| Connecticut | $29,094,058 | +6.6% | +34.8% |
| West Virginia | $13,111,394 | +23.3% | +61.2% |
| Delaware | $1,123,101 | +4.5% | +33.2% |
| US Total | $496,401,315 | +7.7% | +21.9% |
Notes
- Monthly growth figures are adjusted for the number of days in the month. That is, they represent the change in daily average revenue, not full-month gross revenue.
- West Virginia reports revenue weekly, not monthly. Its monthly totals are an estimate, assuming that revenue for partial weeks is distributed evenly between the seven days.
- Pennsylvania only reports adjusted revenue (gross revenue, less promotional spending). Bonus calculates gross slots revenue by subtracting payouts from coin in, but no such data is available for table games and poker. Therefore, actual gross revenue is probably somewhat higher than what we report.
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