Record-Breaking Revenues in US Casinos as Inflation Worsens
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The entire gambling industry is shocked as US casinos, land-based and online, register the highest revenue numbers in history! This also comes as a surprise due to the worsening inflation, which made it difficult for experts to predict the outcome of 2022’s first quarter.
Revenues in the first quarter of 2022
The American Gaming Association reported a record $14.31 billion gross gaming revenue in the first quarter (Q1) of 2022.
How they got it
| Slots | $8.19 billion |
|---|---|
| Table Games | $2.38 billion |
| Sports betting | $1.58 billion |
| iGaming | $1.21 billion |
The largest revenue increase was registered in New York, at an impressive 42.2%.
This made the jurisdiction’s total income reach $999.6 million, mainly due to the launch of online sports betting services in January 2022.
The exception
Kansas is the only state that saw a decline in table game and slot revenues. This was mainly determined by the harsher operating restrictions imposed on the Kansas City market.
Q1 2022 revenue records vs past years
The US gaming industry saw a steady increase in income, with Q4 2021 and Q1 2022 registering the same amount of revenue ($14.31B).
Before now, no first quarter in the history of US gambling reached such a sum.
However, the only significant revenue drop in recent years is between Q1 2020 and Q2 2020, when total incomes decreased by a sound $7.1 billion.
Gross Gaming Revenue in the US
The 2021 build-up to recovery
| State | Year-over-Year increase | Main improvement factor |
|---|---|---|
| Tennessee | 784.1% | The first full year of earning sports betting revenue |
| Michigan | 322.8% | The first year of earning sports betting revenue |
| New Mexico | 317.1% | Casinos were reopened after almost one year of inactivity |
2020 was a disheartening year for gaming operators worldwide, including those providing services in the US.
However, 2021 came with noticeable increases in revenue, especially in Tennessee, Michigan, and New Mexico.
Las Vegas Strip
The 20 largest US gaming markets significantly improved their revenues in 2020, with the Las Vegas Strip remaining by far the most profitable.
The improvement resulted from resuming all activity after the 2020 shutdowns.
Staggering impact on US economy
All income generated by gaming operators reflects the industry’s contribution to the US economy.
Gambling tax revenue can have a positive impact because:
- Given the slowing pace of the economy and the increasing inflation, it may help avoid a recession;
- If revenue progresses at the same rate, it can lead to industry expansion and, subsequently, to creating more jobs.
In 2021, a record $11.69B of tax revenue was paid by commercial gaming operators, exceeding the taxes in the previous year by 75%.
As a rule, gambling-related income is taxable
- Players must report all slot or video poker earnings above $1200;
- Table game earnings exceeding $600 and earnings that are 300 times your wager must be reported as well;
- The income is taxable even if you earn it by playing on overseas gambling websites.
Flat rate for federal taxes
Players who report their gambling income using Form W-2G must pay a flat federal tax of 24%.
What does this mean for US gamblers?
If gambling revenue continues to increase, US gamblers may have to abide by stricter rules in the future.
A few other possible consequences
- Online casino operators may become motivated to provide better services, given the growing competition. Some already distinguish themselves as the best payout casinos internationally or as top minimum deposit casinos with US users;
- Taxes may increase along with the industry’s profit;
- Operators may become subject to much more thorough audits and verifications;
- Additional safety measures could be imposed, including measures that involve sharing more personal information.
Even so, this isn’t necessarily something to worry about. Gaming industry development can also create a more secure gameplay environment for millions of US players.
States with the highest gross gaming revenue
Nevada currently generates the highest gaming revenue in the United States, with a total income of $13.43 billion in 2021.
In Q1 2022, Nevada ranks first out of all American states
| State | Total revenue |
|---|---|
| Nevada | $3547.1 million |
| Pennsylvania | $1277.7 million |
| New Jersey | $1178.2 million |
| New York | $996.6 million |
| Michigan | $781.9 million |
In terms of land-based casinos, only eight states registered lower revenues, maintaining a negative rate ever since Q1 2019. They include two of the best ranking states from the table above, respectively:
- Pennsylvania
- Michigan
This shows a growing interest in online casinos, particularly in mobile casinos UK.
Change is due soon
Since many new casino sites keep appearing in the market and their overall impact on the industry’s total revenue is positive, gaming as we know it may change its parameters soon.
Global comparison
| Country | Gross gaming revenue (GGR) in 2022 |
|---|---|
| United States | $105.40 billion |
| United Kingdom | $49.74 billion |
| South Korea | $14.35 billion |
| Germany | $12.39 billion |
| Turkey | $4.98 billion |
Given that the country in second place generated less than half of the US’s total income, this hierarchy may remain the same for the foreseeable future
In 2022, the US takes first place globally when it comes to gaming revenue.
Experts say that the US gambling market is expected to increase by 11.7% each year from 2022 to 2030.
Circumstances may change
After the Covid pandemic and other unexpected events, it remains to be seen whether this record Q1 revenue will be followed by long-term growth or not.
