There has been a consistent theme to 2022 online gambling revenue updates. While US markets continue to grow, that growth is now slower than it has been in recent years.
September gross gaming revenue (GGR) figures for the three major online gambling states – NJ, PA and MI – highlight this trend. In 2021, their combined monthly GGR rose 7.4% from August to September. In 2022, the increase was just 2.4%.
On the one hand, any increase is a good thing. On the other, we’ve come to expect strong numbers in September, so 2.4% is a little disappointing. Even accounting for the shorter month, the increase in daily average gross gaming revenue (DAGGR) is only 5.9%.
Why September is Such an Important Month
US online casinos have always had some seasonality to their numbers. Summer is a slow time as people find other ways to have fun. Before sports betting, New Jersey’s online casinos often saw their biggest increase in October. However, crossover from sportsbooks means that the return of the NFL in September should now be the month when revenue bounces back from the summer slump.
In 2021, that was definitely the case. It was the biggest month of the year for Pennsylvania and Michigan online casinos, while in New Jersey, it was only beaten by an unusually good March.
Of the three, New Jersey is the only one to have fared better in 2022, and not by much. Pennsylvania’s September increase in DAGGR fell from 12% in 2021 to 9.6%, while Michigan was by far the worst off.
In fact, Michigan is the only state to have seen a decline in monthly gross revenue, although that equates to a slight increase in the daily average. Still, it saw a rise of only 1.6% in DAGGR, and, as a result, its annual growth rate has plummeted from 35% to 26%.
Conversely, the smaller states had a great month. West Virginia saw its daily average skyrocket nearly 15%, a significant improvement over last year, and Connecticut, still in its freshman year, performed nearly as well.
New Jersey Online Gambling Revenue – Sep 2022
Online casinos yielded $133 million for the Garden State in September, while NJ online poker rooms contributed an additional $2.2 million, for a total of $135.2 million. While setting new monthly records was once the norm, that hasn’t been the case in 2022. New Jersey has yet to surpass the $137.8 million it posted all the way back in January.
At the licensee level, the story in New Jersey is that the big fish won in September, and the little fish suffered.
The three smallest licenses – Ocean, Tropicana and newcomer Bally’s – were also the only three to see their DAGGR decline. That’s particularly disappointing for Bally’s, as it brings to an end eight months of near-continuous growth since it launched its own Bally Casino site. That’s likely a sign that it has found its position in the market, ahead of Ocean but trailing the likes of Tropicana and Hard Rock Casino.
One-time market leader Golden Nugget had a solid month, increasing DAGGR 12.5% and closing some distance with the new top dog Borgata. Despite that, it slipped one spot in the rankings to third, having been narrowly surpassed by Resorts, which had the best monthly performance in the state, gaining 14.9%.
Pennsylvania Online Gambling Revenue – Sep 2022
Pennsylvania had the best month of the large states. PA online casinos produced $104.8 million in slots revenue, $32.2 million from table games, and $2.7 million from poker, for a grand total of $139.7 million. Even so, like NJ, it failed to produce a state record. Its all-time best month is March 2022, when the total was $142.7 million.
On the other hand, it does help Pennsylvania to solidify its grip on the title of Highest Grossing iGaming State. In August, we were looking at a dead heat between NJ, PA and MI. Now, the Keystone State has a 3.3% lead on New Jersey and 8.5% on Michigan, which is admittedly still close enough that any of the three could be on top by the time the calendar reads 2023.
Here, too, it was a big month for the biggest operators. Penn National – which acts as the land-based partner for BetMGM, DraftKings and its own Hollywood and Barstool brands – saw a 13.7% increase in DAGGR. Valley Forge, which partners with FanDuel and the affiliated Stardust Casino, was up 21.9%.
Smaller operators Wind Creek, Parx and PlayLive! all saw a drop. Given the state-to-state consistency and the time of year, what we may be seeing is players responding to NFL kickoff promotions from the Big Three.
Michigan Online Gambling Revenue – Sep 2022
Michigan doesn’t separate its iGaming numbers by vertical, but its online casinos and poker rooms managed a combined total of $128.7 million for the month. As mentioned, that doesn’t even beat August, let alone set a record. Despite starting the year on a solid note, Michigan has been flatlining, failing to post a monthly increase in DAGGR of more than 4% since February.
DraftKings and FanDuel showed some of the most significant increases in the state, which supports the guess that NFL hype is behind the hot performance of big licenses in other states. BetMGM, on the other hand, dropped 3.1%. Its market share has fallen below 36% for the first time since March 2021, when the market was just two months old.
TwinSpires revenue dropped to near zero as the site finally shut down. More puzzling is a 59% crash for FireKeepers Casino. Smaller operators often experience considerable volatility, but that is a giant swing even by those standards.
West Virginia Online Gambling Revenue – Sep 2022
It wasn’t too long ago that West Virginia was used as an example of how small markets were challenging for online gambling companies. However, the Mountain State has been on a tear in 2022, while larger states have slowed down. Its three licenses posted a combined $10,682,989 GGR for September, marking the state’s first trip into eight-digit territory.
The 14.9% monthly increase in DAGGR also pushed West Virginia north of 100% in terms of annual growth. Its total in September 2021 was a mere $5.2 million. Despite that rapid growth, it still trails the big states by roughly a factor of two in per capita GGR but is closing the distance rapidly.
Although each of the licenses hosts multiple operators, the numbers for WV once again point to DraftKings and FanDuel driving the growth. The Hollywood and Greenbrier licenses, on which they respectively operate, both saw significant revenue increases, while Mountaineer (BetRivers and Caesars) suffered a 5.6% decline.
Connecticut Online Gambling Revenue – Sep 2022
The Nutmeg State has had a shaky year, up and down but ending up in August more or less where it had been in January. It managed to change the narrative in September, posting a nearly 15% increase in DAGGR and setting a new state record with a monthly total of $24,269,410.
However, little has changed regarding the relative position of the two halves of its duopoly. DraftKings held 60.7% of the market, up 0.7% from August, despite a 53.5% increase in promotional spending by the Mohegan-FanDuel partnership. DraftKings also increased promotions, though by a smaller margin of 11.9%.
That said, DraftKings still spends more on promotions than it makes in revenue in CT, and those expenditures exceed Mohegan-FanDuel’s by a factor of almost ten. The question, as always, is when it plans to dial back that strategy and what will happen to its share of the market when it does.
State Totals and Growth Rates
| State | GGR - September 2022 | Monthly Change | Annual Change |
|---|---|---|---|
| Pennsylvania | $139,661,152 | +9.6% | +24.8% |
| New Jersey | $135,256,486 | +6.3% | +10.3% |
| Michigan | $128,734,445 | +1.6% | +25.7% |
| Connecticut | $24,269,410 | +13.5% | N/A |
| West Virginia | $10,682,989 | +14.9% | +106.0% |
| Delaware | $1,312,206 | +1.2% | +65.1% |
Notes
- The monthly change in revenue reflects the daily average (DAGGR) to account for the differing length of months. In the case of September, being a day shorter than August, the change in DAGGR is about 3.3% higher than the change in GGR and more accurately reflects actual operator performance.
- 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.
- Delaware has not reported its September numbers yet at the time of publication, but the article will be updated when it does.
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