.svg)
Body
Gambling revenues in the United States reached record levels last year and that momentum has continued into 2023, but large fines for regulatory failings, unregulated slot machines and offshore websites continue to concern the U.S. gaming industry’s top lobbyist.
“A year ago, we celebrated an incredible resurgence coming out of COVID-19,” Bill Miller, president and CEO of the American Gaming Association (AGA), said Wednesday (February 15) during an AGA webinar to present commercial gaming revenue data for 2022.
“Frankly, some folks thought we couldn’t replicate the 2021 results. We didn’t … we exceeded them.”
Commercial casinos in the United States posted $60.4bn in revenue in 2022, up nearly 14 percent over 2021 levels.
Data released Wednesday by the AGA showed that brick-and-mortar casinos and retail sports betting accounted for 80.5 percent of total gaming revenues, while combined revenue from mobile sports betting and online casinos made up 19.5 percent.
Online casino gaming revenue grew 35.2 percent year-over-year to $5bn in revenue in just the six states where iGaming is fully legal. Miller noted that five states — Illinois, Indiana, Maryland, New Hampshire and New York — are actively considering iGaming bills during their legislative sessions.
“We expect more [bills] to come,” he said.
Shortly after Miller’s presentation Wednesday, Bally’s Corp., which owns Rhode Island’s two brick-and-mortar casinos, announced it will seek legislative approval during the state's General Assembly session to implement online gaming. A Bally’s spokeswoman said the legislation has not yet been introduced, but is expected to be released in a couple of weeks.
The AGA’s revenue figures do not include revenue generated by slot machines, table games and sports betting within tribal casinos.
“Commercial and tribal gaming revenue is likely to exceed $100bn for full year 2022 when tribal numbers are reported later this year,” Miller said.
“What’s more impressive is we did this while international visitation, business travel and conventions were still recovering,” he added. “Consumer demand for gaming has proven resilient.”
Miller partly attributed the industry’s growth to casinos being able to expand their demographic appeal coming out of the coronavirus pandemic.
David Forman, the AGA’s vice president of research agreed, saying AGA research had shown the average age of a casino customer was 42 last year, down from nearly 50 in 2019.
Illegal Gambling In Focus
Miller cautioned there were some challenges ahead.
On the state level, he said, effective relationships with regulators and policymakers that support gaming are vital to achieving the AGA’s priorities. The AGA plans to stress gaming’s value to communities, the protections of the legal market, and the importance of flexible regulation.
At the federal level, Miller said the association would encourage investment through sound tax policy, continue the modernization of anti-money laundering regulations and encourage law enforcement to combat the illegal market. He said other priorities include looking at ways to raise the slot tax reporting threshold and eliminate the federal sports-betting excise tax.
During Wednesday's webinar, Miller continued his campaign against illegal and unregulated gambling, including supposedly skill-based gaming machines in bars, as well as offshore sports betting and casino websites.
“We’re using every tool at our disposal to go after illegal businesses,” he said. “We won’t see results overnight, but we’re in this one for the long haul. I know I’m preaching to the choir here, but the illegal market is the single biggest threat we face.”
The AGA estimates illegal offshore sportsbooks and casinos, bookmakers and unregulated machines cost the legal gaming industry $44bn annually, and local communities some $13bn in tax revenue.
In terms of skill-based games and unregulated gaming devices, Miller said the AGA is actively lobbying state legislatures to strengthen laws and close loopholes.
In a press conference following the AGA’s presentation Wednesday, Miller said he was aware of a recent state court ruling in favor of skill-game provider Pace-O-Matic in Pennsylvania, as well as a rally held Tuesday at the Kentucky Capitol in support of legalizing skill games.
Miller said Pace-O-Matic and other companies allow tavern owners and convenience stores to operate their machines believing they are a game of skill, but they are gambling devices.
“It is important for lawmakers to recognize the difference,” he said. “Our industry won’t be undercut. We have every belief when law enforcement looks at this, they will see illegal gambling.”
Currently, there are 36 states and the District of Columbia that have legalized sports betting. Miller estimated there could be 40 legal U.S. sports-betting markets by the end of the year.
But recent fines for violations of advertising rules in Ohio against Caesars Entertainment, DraftKings, Penn Entertainment’s Barstool, and BetMGM led to questions as to whether Miller was concerned about those incidents.
He said regulators have to do their job, stressing that with all the new legislation and regulatory frameworks, there have been “very few hiccups.”
Miller also reminded reporters that the industry has created a whole new gaming vertical in less than five years since the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA), allowing states to determine whether to legalize sports betting.
Both DraftKings and Penn Entertainment on Wednesday settled their complaints with the Ohio Casino Control Commission, paying penalties totaling $750,000. So far, four operators in Ohio have violated the state’s advertising regulations, with Caesar also accepting a $150,000 fine without a hearing, leaving BetMGM waiting for a hearing on its complaint.
