Total US gross gaming revenue from the commercial sector has increased 21.4% since 2019, the previous best year on record

US Commercial Gaming Was Explosive In 2021, But A Slowdown Is Inevitable

Despite some continued disruptions from the COVID-19 pandemic, US casinos and online gambling sites had their best year to date.

According to the American Gaming Association (AGA), 2021 gross gaming revenue for the commercial sector exceeded $53 billion. The previous record of $43.7 billion dates back to 2019. That’s because of pandemic-related casino closures and disruptions to professional sports leagues, which held revenue back in 2020.

The AGA is a trade organization representing the American casino industry. It updates its Commercial Gaming Revenue Tracker on a quarterly basis, and the announcement accompanied the release of the data for Q4 2021.

These numbers include revenue from commercial retail casinos and sportsbooks, plus regulated online gambling sites with private sector operators. They exclude lottery, tribal gaming, and other miscellaneous non-casino gambling activities like parimutuel horse betting, card rooms, etc.

AGA CEO Bill Miller said in a press release:

The success of 2021 reflects our commitment to health and safety and how Americans have welcomed gaming’s expansion across the country. Today’s industry is effectively meeting customers how and where they want to engage—whether at a casino or through mobile gaming.

New verticals lead the charge

The AGA provides both total GGR and a breakdown into the following channels:

  • Retail slots
  • Retail table games
  • Sports betting (retail and online)
  • iGaming

All four showed an increase. That’s true whether you’re looking at the full year or just Q4, and whether you’re comparing to 2020 or 2019.

In the case of retail revenue, 2019 is probably the better full year comparison. Retail slots revenue has risen 10% over two years, while table games are up only 1%. The changes are much bigger from 2020 to 2021. However, that’s because of the casino closures, which made Q2 2020 a near-total write-off.

Online gambling, on the other hand, has enjoyed lasting benefits from those same closures. The loss of retail gambling options gave Americans the opportunity to discover a new way to gamble, and they haven’t looked back. Online casino and poker revenue rose 139% from 2020 to 2021. It has enjoyed a sevenfold increase since 2019, but that year’s revenue came almost entirely from New Jersey online casinos.

Sports betting is more complicated. It suffered in spring 2020 to almost the same degree as retail gambling. On the other hand, many new online casino markets have opened up since 2019. So, neither time frame provides a particularly fair comparison. The growth has been explosive either way, however. Sports betting revenue increased 177% from 2020 to 2021, and if we go back one more year the increase is 366%.

Despite the pandemic disruptions, these numbers paint a clear picture of an industry whose growth is being driven by new product classes and new markets. Together, sports betting and iGaming accounted for just $8 billion of the $53 billion total in 2021, or 15%. However, that’s a huge increase from 3.3% in 2019, and that share should continue to grow.

A slowdown in growth is inevitable

That said, the rate of growth these verticals enjoyed in 2021 isn’t sustainable. A surface reading of the numbers suggests that it was already slowing down in the year’s final quarter.

Looking at just Q4, iGaming’s year-on-year growth was 124%, a bit lower than the 139% for the full year. The difference for sports was larger, at just 73% for the quarter compared to 177% for the full year.

Here too, however, we have to consider pandemic effects. Sports betting’s full year numbers are skewed by Q2 2020, when there were few events to bet on. 2021’s growth for that quarter is a staggering 1280% because of that.

Meanwhile, iGaming got a huge boost at that time, as one of the few gambling options still available. Those gains have endured, but they look bigger in Q1 2021, because the 2020 numbers for that quarter still reflect the pre-pandemic economy. Q1 2021 vs. 2020 showed a 240% increase, but from Q2 on the growth rate has held quite steady in the 115% to 125% range.

Still, we cannot expect 2022 to match these numbers, at least when it comes to iGaming. The major driver of growth in both verticals has been the opening of new markets. Online sports betting has gained New York this year, which will surely move the needle. There are no comparable market openings coming for online casinos. At best, we may see Illinois pass its Internet Gaming Act, but that’s a bit of a long shot. Even if the bill does pass, the market wouldn’t open until Q4 at the earliest.

Looking at last year’s growth rate for individual iGaming states, and extrapolating into 2022, an increase of about 25% or 30% for that vertical is a more realistic ambition.

Annual growth rates by quarter

Here’s what each quarter looked like for each product segment. All growth rates are given relative to 2020, for consistency.

 Q1 (Δ y/y)Q2 (Δ y/y)Q3 (Δ y/y)Q4 (Δ y/y)
Total GGR$11.1B (+18%)$13.6B (+493%)$13.9B (+54%)$14.3B (+56%)
Retail Slots$6.7B (+11%)$8.7B (+548%)$8.7B (+44%)$8.3B (+45%)
Retail Table Games$1.6B (-12%)$2.1B (+607%)$2.5B (+58%)$2.5B (+68%)
All Sports Betting$1.0B (+270%)$0.9B (+1280%)$0.9B (+153%)$1.5B (+73%)
Online Casino$0.8B (+239%)$0.9B (+124%)$0.9B (+116%)$1.1B (+124%)
- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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