Bonus projects that US online casinos and poker rooms will generate almost $6.5 billion in gross gaming revenue (GGR) this year.
That would represent an increase of over $1 billion compared to the 2022 total. All told, the six states with legal iGaming saw $5.319 billion in GGR in 2022, which was a 38% increase from 2021.
However, growth has been slowing down, and Bonus expects that trend to continue. We’ve opted for a conservative projection in 2023, with 21% growth across all markets.
State regulators report gross gaming revenue on a monthly (or, in one case, weekly) basis. Although many state markets are still very young, all have been operating for at least a full year. That means we now have enough data to create a forecast for the coming year, taking into account the features of each market and its growth trends.
US Total Online Casino Market Projection – 2023
Six states currently offer legal online casino gaming. From largest to smallest (according to our projections), these are:
- Pennsylvania
- Michigan
- New Jersey
- Connecticut
- West Virginia
- Delaware
Additionally, New York and Indiana are considering legalization in 2023. However, any possible launch would come in September at the earliest, and the prospects are uncertain. We’ve therefore omitted these states from our analysis, though either could potentially add a bit to the Q4 total if it were to launch.
All the existing states have a few features in common:
- Year-over-year growth has been consistently positive, though month-to-month growth has sometimes been negative.
- Long-term growth has been slowing down as the markets mature.
- Smaller markets have generally taken longer to mature than larger ones (Pennsylvania’s slow roll-out being an exception).
- There is a seasonality to the revenue. Summer is a slow period, while growth is strongest in the winter and early spring.
Here are Bonus’s observations and predictions about how total market trends will look in 2023:
- Barring new state launches, we’ll see lower volatility in 2023 than in previous years.
- Most – perhaps all – months will fall somewhere in the $500 million to $600 million range for GGR.
- At least one state, maybe more, will exceed $2 billion in total annual revenue.
- Year-on-year growth will continue to slow. Annual growth figures will be lower in H2 than in H1.
- That slowing growth will highlight the seasonal cycle. Rather than just a slowdown, we will see a distinct drop in summer revenue.
A Note About Online Poker
Because some states lump online poker revenue together with online casinos, we’ve elected to do so across the board. In this article, the terms “iGaming” and “online casinos” are interchangeable and include online poker.
However, we are omitting Nevada from our analysis. It has legal online poker but no online casinos and does not provide separate revenue data for the online channel.
Pennsylvania Online Casino Market Projections – 2023
We forecast $2.07 billion in full-year revenue for Pennsylvania online casinos in 2023. That would likely make it the highest-grossing iGaming market in the US this year.
Historically, New Jersey has been the largest online casino market. However, Pennsylvania very narrowly overtook it in 2022 with $1.67 billion in full-year revenue to New Jersey’s $1.66 billion.
Pennsylvania has the largest population of any online gambling state. There are two reasons it hasn’t taken the top spot until now: First, its high tax rate on slots may have made it a somewhat lower priority for operators. Second, regulatory approval for operators and games has been slower than in other states, leading to a longer ramp-up time.
Here are some key takeaways from our projections:
- Pennsylvania will be the first state to generate over $2 billion in iGaming revenue in a single calendar year.
- Quarterly year-over-year growth: 29% through H1, declining to 24% in Q3 and 15% in Q4.
- Full-year growth: 24% in 2023, down from 29% in 2022.
- Spring peak: $187 million in March 2023
- Summer slump: Low point of $160 million in the summer months.
- Best month: $190 million in December 2023.
Michigan Online Casino Market Projections – 2023
Michigan pulled ahead of New Jersey for the first time in December 2022. We expect it to continue to hold the second-place spot in 2023, with a projected $1.95 billion in full-year revenue.
Michigan is a much younger market than Pennsylvania. However, it got off to a much faster start. At the same time, it has a hard cap on the number of online casino brands.
Those two factors mean it is probably closer to its ceiling than Pennsylvania. On the other hand, it may still have more room to grow than New Jersey and has a larger population.
Our forecast for Michigan online casinos shows the following:
- Could join PA in generating over $2 billion but would need to beat the forecast by 2.8%.
- Quarterly year-over-year growth: 29% in Q1, 25% in Q2, 21% in Q3 and 17% in Q4.
- Full-year growth: 23%, down from 33% in 2022.
- Spring peak: $169 million in March 2023.
- Summer low: Low of $150 million in monthly revenue.
- Best month: $179 million in December 2023.
New Jersey Online Casino Market Projections – 2023
We expect New Jersey to generate approximately $1.9 billion in online casino revenue in 2023.
New Jersey is by far the most mature market, having debuted over five years earlier than any other except Delaware. As such, it may also be the closest to its ceiling. It fell into third place at the end of 2022, and we expect it to remain in that position in 2023.
From 2014 to 2019, New Jersey maintained annual growth of roughly 25%. However, that was before the beginning of sports betting and the associated marketing blitz. That and the effects of the COVID-19 pandemic brought in a lot of new users all at once.
The downside is there are now fewer new players left to recruit. The New Jersey market showed signs of leveling off in H2 2022, and we don’t expect a return to pre-2019 growth rates in 2023.
In 2024 and beyond, New Jersey will likely experience single-digit growth rates. We see that for US retail gambling and mature European online gambling markets. While it should remain in the double digits for much of 2023, we expect it to be dipping below 10% towards the end of the year.
Highlights from our forecast include:
- Approximately $1.9 billion in full-year online casino and poker revenue.
- Quarterly year-over-year growth: 15% to 17% through three quarters, dropping to 9% in Q4 2023.
- Full-year growth: 14%, down from 25% in 2022.
- A weaker seasonal cycle than other states: Highs of $167 million in March and December, summer low of $151 million.
Connecticut Online Casino Market Projections – 2023
We estimate that the Connecticut online casino market will produce $370 million in full-year revenue for 2023.
Connecticut is an unusual market in that it is a duopoly. Short of a change in state laws, it will remain as such. That’s because there are only two gaming tribes in the state: the Mashantucket Pequot and the Mohegan. Each is allowed to operate a single brand.
The story of the market has been that of DraftKings (partnered with the Mashantucket Pequot) attempting to spend its way into a dominant position. Since the market launched, the company’s monthly promotional expenditures have rivaled and often exceeded its gross revenue. Although it does hold more of the market as a result, it has had a hard time pushing much past a 60% share.
Connecticut is a wealthy state but trails behind NJ, PA and MI in per capita gaming revenue. That implies more room to grow, but it’s hard to know what will happen to the growth rate if DraftKings takes its foot off the pedal.
Our forecast for Connecticut projects:
- $370 million in full-year iGaming revenue, a 31% increase from $281 million in 2022.
- Quarterly year-over-year growth: 36% in Q1, 33% in Q2 and Q3, down to 28% in Q4.
- Spring peak: $32 million in March 2023.
- Summer low: $27 million in June 2023.
- Best month: $36 million in December 2023.
West Virginia Online Casino Market Projections – 2023
Our projection for West Virginia estimates $162 million in gross online casino revenue for 2023.
West Virginia is the smallest market other than Delaware. However, it has also been the fastest-growing by a wide margin. It more than doubled in size from 2020 to 2021 and grew a further 83% in 2022.
Not all that growth has been organic, however. New operator launches were the primary driver in 2021, while 2022 saw the arrival of live dealer games.
Our projection for 2023 takes that into account. Therefore, we expect growth to slow considerably, though it should still be the fastest of the six states.
The Bonus forecast for West Virginia in 2023 calls for:
- $162 million in full-year online casino revenue.
- Full-year growth: 44%, down from 83% in 2022.
- Strong H1: 60% year-over-year growth in Q1 and 63% in Q2.
- Weaker H2 following the one-year anniversary of live dealer gaming: 34% year-over-year growth in Q3 and 27% in Q4
- Spring peak: $14.6 million in March 2023.
- Summer low: $12.5 million in June 2023.
- Best month: $15.1 million in December 2023.
Delaware Online Casino Market Projections – 2023
Delaware online casinos will produce an estimated $17 million in gross revenue in 2023.
Delaware online casinos have been around for as long as New Jersey’s. Despite that, Delaware is essentially a rounding error in the total US market.
Its lottery monopoly model makes for a lackluster product and very little in the way of marketing. As well as being the smallest of the six states, it has the lowest per-capita online gambling revenue.
In principle, that means there is still room to grow. However, there’s no reason to expect that growth to be swift. The Delaware market grew 24% in 2021 and 29% in 2022. We expect growth in 2023 to continue in that range.
The situation in Delaware could change significantly if the lottery opts to change its technology partner. That contract is up for renewal this year. However, Bonus expects it to continue with 888 Holdings, so our projections do not take the possibility of such a change into account.
For 2023 we project:
- $17 million in full-year online casino revenue.
- Full-year growth of 24% in keeping with recent years.
- Monthly revenue totals between $1.2 million and $1.5 million.
- No significant seasonal cycle unless an online sports betting product launches in 2023.
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