October revenue reports are still trickling in, but partial numbers have it on pace to be an all-time record month of volume for legal online gambling in the US.
Of the 26 markets that have reported so far, 16 set new single-month handle records in October. Same-state handle grew 12% YoY for the reporting group, though revenue has slumped by double digits nearly across the board. The running hold of 7.3% would make it the leanest month for sportsbooks since last November.
Online casinos, meanwhile, continue to outperform their sports betting counterparts by a big margin, underpinned by a far more consistent pattern of long-term growth. Sports might drive the public conversation around expanded gambling, but online casino games do most of the heavy lifting in the states that allow them.
Let’s zoom in on the three largest US online gambling markets: Michigan, New Jersey, and Pennsylvania.
October brings mixed results for sportsbooks
The first full month of football betting was a bit lukewarm for these three key markets given a record run of customer-friendly NFL results. October 2023 also had five NFL Sundays compared to four this year.
Wagering in Michigan did grow 6% year over year to $583 million, a best-ever October in the fifth year of operation. Revenue, however, tumbled 30% to $32.2 million on the back of a 5.5% hold that was the lowest for the state since June 2022.
New Jersey is locked into the No. 3 spot on the US leaderboard, but its October report was not its best either. Handle slipped 13% to $1.13 billion against a strong 2023 comp, and revenue dropped 16% to $77.5 million.
Pennsylvania remains one of the most consistent markets in the country, with October volume growing 4% to $858 million. Matching New Jersey’s 6.8% hold, sportsbooks in the commonwealth won $58.1 million (-21%) for the month.
Together, this trio generated $2.57 billion (-4%) in sports betting handle and $168 million in gross revenue (-21%) in October.
Online casinos take the spotlight
The online casino reports for these states are the strongest they’ve ever been.
Michigan, New Jersey, and Pennsylvania generated a whopping $679 million in combined iGaming revenue in October, more than four times their total sports win. All three states set new monthly records.
All seven US iGaming markets set new revenue records in October, in fact, extending their seemingly endless streaks of double- (or triple-) digit annual growth.
Michigan
Michigan online casinos produced a record $221 million in gross revenue in October, their second consecutive month (and third overall) in the $200-million club.
Taxable proceeds were mitigated by the statutory maximum 10% promotional deductions, but the state still collected $56.9 million in taxes.
New Jersey
New Jersey online casinos also posted their second straight $200+ million month with a record $213 million in gross revenue. More than $18.5 million of that stemmed from promotional credits.
Tax revenue came to $37.2 million.
Pennsylvania
Pennsylvania remains the largest iGaming market in the country, and its lead over the field is only growing.
October’s $245 million in revenue represents a US record and a year-over-year increase of 31% for the commonwealth. It first crossed the $200 million mark in December 2023, and it has repeated the feat in eight of the 10 months since.
October tax revenue from Pennsylvania online casinos also reached a new high at $83.1 million.
Legislative headwinds keep the lid on iGaming
For all its success on the balance sheet, casino-style online gambling can still be a tough sell in state legislatures. Only seven states allow online casinos to operate legally within their borders, and the poker-only Nevada market has been limited to one brand for years.
The repeal of PASPA did open the door to iGaming for a few states, most notably Michigan and Pennsylvania. Both passed online casino legislation as part of larger packages that featured sports betting, and West Virginia and Connecticut followed similar paths with a couple of years in between.
Still, the legal online casino industry has only grown from two states — Delaware and New Jersey — to seven since 2018. Compare that to legal sports betting, which has expanded into 38 states plus the District of Columbia and Puerto Rico.
For now, fears of cannibalizing land-based casino revenue and concerns over problem gambling remain the major hurdles to further expansion.
