Posted on: May 14, 2022, 12:28 p.m.
Last update: May 13, 2022, 6:30 a.m.
The American Gaming Association (AGA) recently released its annual “State of the States” report.
The detailed report, which provides a comprehensive overview of the US commercial casino industry, revealed that gambling has more than recovered from the COVID-19 pandemic. It also showed that for states seeking to generate substantially new fiscal flows through gaming expansion, iGaming easily outpaces sports betting.
As of December 31, 2021, 30 states, plus DC, had some form of legal sports betting. Only six states allow online casinos with interactive slots and table games.
While mobile sports betting had five times more legal jurisdictions than the number of iGaming states, online casinos generated 86% of the amount of gross revenue generated by bettors.
The 31 sports betting markets recorded gross gaming revenue (GGR) of $4.33 billion. The six iGaming states totaled an online GGR of $3.71 billion.
Considering that iGaming is only legal in six states and sports betting is legal in over 30 states, that means how profitable the iGaming market is or can be (especially compared to sports betting ),” Atlantic City-based gaming attorney CJ Fisher, who co-chairs law firm Fox Rothschild’s Gaming Practice Group, said. Casino.org.
“In short, the comparison is compelling, and I think it supports the continued expansion of iGaming in the United States,” Fisher added.
Although life has started to regain some meaning in 2021 and land-based casinos have been wide open for business, iGaming revenue has continued to thrive. The GGR of regulated online casinos increased by 139% from $1.55 billion in 2020.
iGaming tax benefit
Not only does iGaming generate more gross revenue than sports betting, but states generally tax online casino revenue higher than sports betting.
New Jersey, for example, is one of the few states where iGaming and sports betting (retail and mobile) are legal. The state levies an effective tax rate of 9.75% on physical GGR sports betting and 14.25% on mobile. iGaming platforms are required to share 15% of their gross revenue with the state.
In 2021, online casinos in New Jersey generated over $205.2 million in tax revenue. Sportsbooks, both retail and online, delivered less than half that amount to the state at $102.6 million.
Pennsylvania, another state where online casinos and sports betting are legal, reported an iGaming GGR of $1.11 billion in 2021. Sports betting retained $340.1 million in player wagers.
Pennsylvania taxes internet slot machines at 54% and income from interactive table games at 16%. The state also levies one of the highest taxes on sports betting, but at 36% it’s still significantly lower than online slots, which account for the lion’s share of iGaming’s revenue.
iGaming is proving to be a substantial tax generator for states looking for new revenue. But the many states that only allow traditional casino games did very well last year as pent-up demand fueled record gambling across the country.
The AGA reported in its “State of the States” that GGR from land-based casinos, video game terminals, iGaming, sports betting and daily fantasy sports totaled a record $53.03 billion in 2021. The new cap has easily overtaken the American commercial gaming industry. previous record of $43.65 billion set in 2019.
AGA President and CEO Bill Miller only sees the industry growing further.
“While 2021 has been a tumultuous year, I am confident it has set a new foundation for long-term gaming as we deliver cutting-edge entertainment to consumers and anticipate the full resumption of travel, events and entertainment. “, concluded Miller.