The standard summer slowdown in online gambling revenue has continued for most states, but not Michigan.
Revenue reports are in for the states where online casinos are legal. Pennsylvania is now on a four-month slide, while New Jersey has just about stabilized, but Michigan managed positive growth for the first time since April. Connecticut also saw a downturn, but the two smallest states, West Virginia and Delaware, enjoyed the biggest gains of all.
Despite summer typically being the worst season for online gambling, the industry hit an important milestone. All-time, all-state aggregate revenue has just gone over $20 billion.
It’s taken almost nine years since the first legal online casinos appeared to hit that mark. The next $20 billion won’t take nearly so long, however. The big three states (NJ, PA and MI) easily cleared $1 billion each last year. With the help of the smaller states, the US total should be in the vicinity of $5 billion in 2022. So, it will probably take more like four years to double the all-time total, and less if other potentially big markets like New York or Illinois online casinos ever join the club.
Michigan Takes the Number Two Spot
Last year, the hierarchy of states was pretty clear, though there were already signs it might not stay that way.
New Jersey was both the grandpa and the top dog of US online gambling. Pennsylvania, with its larger population, was the challenger. The newcomer, Michigan, was in third despite a strong start, and then the other, smaller states were far behind.
In 2022, the race has become much tighter. New Jersey is back on top now, but its dominance is less of a given since Pennsylvania online casinos pulled narrowly ahead from March until May. The tables have turned, however, as Pennsylvania has plunged from first to third in just two months.
That puts Michigan – with a state total of $126.6 million for July – in the number two spot for the first time.
Perhaps more importantly, it’s the fastest-growing of the three. New Jersey’s year-over-year growth has fallen to 15% in July, and Pennsylvania’s to 17%, while Michigan’s sits at 37%. If that were to hold for the next 12 months, then Michigan would become the highest-grossing iGaming state by a large margin.
BetMGM still holds the lion’s share of the Michigan market at 38%, while DraftKings and FanDuel are close to even at 15% apiece.
New Jersey Online Gambling Revenue – July 2022
Online casinos in the Garden State pulled in $134.4 million in July, while NJ online poker rooms contributed another $2.3 million for a total of $136.7 million.
That’s an increase of $3.6 million from last month, but only because there’s an extra day in July compared to June. Daily average gross gaming revenue (DAGGR) was almost unchanged, dropping 0.6%.
As mentioned, annual growth fell to just 15%, from over 24% in June. That’s the lowest it has been since summer 2018.
The silver lining is that the New Jersey total might have been up somewhat if Tropicana hadn’t been forced to shut down temporarily. The loss of its flagship skin caused DAGGR to drop over 26% for that license, enough to push the state into the red despite gains for half the other licenses, including a 2.6% increase for market leader Borgata (home to BetMGM as well as its own brand).
Once Tropicana has completed its migration to the Light & Wonder platform, it will reopen. Its revenue should bounce back at that point, and perhaps it will even perform better, depending on how its customers like the new software.
Pennsylvania Online Gambling Revenue – July 2022
Pennsylvania began the summer on a similar curve to New Jersey and Michigan, but has seen revenue tumble over the past two months. Like New Jersey, it has seen its annual growth rate shrink, from over 42% to start the year to under 18%. Its monthly total of $123.2 million for July is the lowest since November last year.
For July in particular, market leader Penn National is largely to blame, with DAGGR for its license plunging 8.4%. Penn is home to most of the largest names in the state, including BetMGM and DraftKings, as well as its own Hollywood and Barstool brands.
Most other licenses also had a bad month, however. The only ones to see an increase in DAGGR were Wind Creek, PokerStars, and, paradoxically, TwinSpires, which was supposed to shut down in the first half of the year.
Connecticut Online Gambling Revenue – July 2022
Connecticut online gambling revenue has remained almost unchanged since May, at just under $21 million. Due to the varying lengths of the months, however, that implied a slight gain in DAGGR in June and a corresponding drop in July.
The story, as usual, continues to be DraftKings’ massive promotional spending. This increased 40% in June, to over 1.4 times its gross revenue. It is presumably trying to avoid losing any more market share to its only rival in the duopoly, Mohegan, having slipped from 62.3% in June to 61.0% in July.
West Virginia Online Gambling Revenue – July 2022
West Virginia had a very positive month, with revenue exceeding $8.5 million and DAGGR increasing 15%. On the other hand, it lost more than any other state in June, so much of the July gains are simply a recovery from that drop. WV revenue has tended to be quite volatile, perhaps because it is a small state.
That said, the market gains come in large part from one license, Mountaineer Casino, which saw its DAGGR shoot up 47%. It hosts both Caesars Casino and BetRivers Casino, so it’s impossible to know with certainty which one saw increased activity. However, BetRivers was one of two sites to launch live dealer games in WV in July, so it seems like a good bet that’s where the added revenue is coming from.
The other site to add live dealer was DraftKings, on the Hollywood Casino at Charlestown license. Although its increase of 16% pales in comparison to Mountaineer, it was larger to begin with. Also, the third license in the state, Greenbrier, does not yet host any live dealer casinos and saw only a 7% increase in DAGGR.
Delaware Online Gambling Revenue – July 2022
Delware’s lottery-operated online casinos had a record month, exceeding $1.25 million in gross revenue for the first time. Delaware Park saw the bulk of the gains, pulling in over a half-million, while Bally’s Dover was the only one of the three to see revenue decline.
State Totals & Growth Rates
Here are the grand totals for each state in a single table, along with the monthly and annual growth rates.
| State | GGR - July 2022 | Monthly Change (normalized) | Annual Change |
|---|---|---|---|
| New Jersey | $136,701,316 | -0.6% | +15.2% |
| Michigan | $126,614,519 | +0.8% | +37.2% |
| Pennsylvania | $123,213,937 | -5.6% | +17.9% |
| Connecticut | $20,805,188 | -4.0% | N/A |
| West Virginia | $8,855,297 | +15.0% | +67.2% |
| Delaware | $1,253,607 | +8.4% | +58.0% |
Notes
- Monthly changes are normalized, that is, corrected for the number of days in each month. They therefore represent the change in daily average revenue rather than in the monthly totals.
- Where possible, figures represent gross gaming revenue 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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