The American Gaming Association revealed that the US gambling industry enjoyed another record-breaking year in 2024, with the vast majority of states posting year-on-year improvements in revenue. These figures could continue to rise as more states consider legislative reform that would change online gambling laws.
At present, 38 states and Washington, DC allow licensed online sportsbooks, while just 7 states allow online casino operations. This lack of facilities has resulted in a growing number of consumers exploring offshore betting sites, with states missing out on valuable revenue streams.
Online gambling expert Aman Jain explains that the demand for real money casino sites has driven bettors to platforms that operate in other countries, with the best options offering licensed and secure betting for customers. Only the operation of betting sites in prohibited states is illegal, allowing consumers to exploit his loophole.
Campaigners bringing bills to the states argue that citizens can already access online betting sites, so offering licensed operations would hand states greater control to protect customers, as well as access to lucrative revenue streams. The success of states already offering these markets has been used to present cases, and state autonomy allows lawmakers to determine tax rates and how this money is allocated.
The sports betting industry in the US was buoyed by the addition of Vermont and North Carolina, helping the industry enjoy year-on-year growth of 28.7%.
While only seven states allow online casino betting, Rhode Island, New Jersey, West Virginia, Delaware, Michigan, Connecticut, and Pennsylvania, iGaming is also showing growth and has the potential to improve further should other states successfully amend gambling regulations. Despite the threat of online betting, traditional casinos were still able to show revenue growth for 2024.
Of the 38 US jurisdictions with online and commercial betting markets, 28 were able to set new revenue records, with commercial casino gaming spend showing a 7.5% year-on-year increase, rising from $67,011.59 billion to $72,038.60 billion. The District of Columbia was the best performer, seeing its customer spend increase by 181.7% from $19.08 million to $53.74 million. Kentucky also saw a massive rise in spending, jumping from $112.12 million in 2023 to $278.10 million in 2024, a 148% increase.
Nevada continued to bring the highest total amount for 2024 with $15,606.40 billion, a 0.5% increase on 2023’s $15.522.61 billion. The 7.5% increase in spending in 2024 also had a direct impact on commercial casino tax revenue generated in the US. The $15,908.35 billion of tax revenue generated in 2024 was an 8.5% increase on 2023’s $14,660.11 billion.
While Nevada saw the biggest consumer spend, it was only the third-largest contributor in casino gaming tax for 2024. The $1,200.76 billion generated represented a 0.7% drop from 2023’s figure of $1,209.33 billion. Pennsylvania was the year’s largest contributor, generating $2,529.13 billion, a 9% increase from 2023’s $2,319.81.
The second largest tax contribution came from New York with $2,291.17, up 10.8% from 2023’s $2,067.32. The District of Columbia and Kentucky once again showed the biggest growth, 229.2% for the District of Columbia and 148.1% for Kentucky.
The District of Columbia made a number of reforms to its sports betting market, increasing the number of operators. Category A operators are taxed at 20% while Category B operators are taxed at 10%, with the District of Columbia Child Trust Fund being the primary beneficiary of sports betting tax revenue.
Similarly, near the end of 2023, Kentucky launched its retail and mobile sports betting markets, resulting in a massive increase in wagers and tax revenue.
The seven states with legal online casino gambling, excluding the online poker market in Nevada, enjoyed a 28.7% year-on-year revenue increase for a total of $8.41 billion. This was the first year that Rhode Island contributed to these figures after launching its iGaming market in March.
The Rhode Island iGaming market is taxed at a rate of 16.5% for traditional table and card games, while online slots are taxed at 65.45%. The lowest tax rate for online casinos is set at 15% in West Virginia, however, operators are obligated to pay an initial $250,000 license fee and an additional $100,000 renewal fee every five years.
The Pennsylvanian online casino industry has the highest license fee charges of between $4 million and $10 million initial fees and $250,000 renewal fees every five years. Its Online slots are taxed at 54%, while its traditional casino games are taxed at 16%.
The National Indian Gaming Commission has yet to publish data for 2024, but in the previous year, the tribal gaming industry enjoyed a 2.4% year-on-year revenue increase, totalling $41.9 billion. Tribal casinos now span 29 states, with 537 in total compared with the 492 commercial operations in just 27 states.
New York’s casino industry should see a big boost to profits when it launches its three new downstate operations. At present, the licenses are still to be issued, with a host of bids from the biggest names in casino gambling. These operators and their partners have put together plans to create multi-billion-dollar projects that would include massive gaming areas, conference centers, retail units, restaurant and bar spaces, and residential areas.
The winning casino bids will generate thousands of jobs during and after construction, and will help to generate even more in taxable revenue that will then be used to help local areas and citizens.
This is the fourth year in a row that the US commercial gambling industry has experienced growth, and this pattern would have stretched back to 2014 if not for external events creating an anomaly in 2020. It is likely that this trend will continue as more states explore the possibility of legalized online casino markets and the expansion of existing sports betting operations.
