US Commercial Gaming Revenue Hits Record $17.71 Billion in Q3

The U.S. commercial gaming industry set a new benchmark in the third quarter of 2024, recording $17.71 billion in revenue, according to the American Gaming Association (AGA). This milestone marks the highest Q3 revenue in industry history and underscores a 15th consecutive quarter of year-over-year growth.

This record-breaking quarter reflects a broader trend of sustained expansion within the gaming sector. Since the onset of the COVID-19 recovery period, the industry has capitalized on increased consumer demand, innovation in online platforms, and strategic market expansions. September 2024 marked the 43rd consecutive month of year-over-year revenue increases, highlighting the industry's adaptability and resilience.

Online Gaming Dominates Growth

Online gaming’s rapid expansion continued to reshape the industry landscape. iGaming revenue climbed 30.3% from Q3 2023 to $2.08 billion, while legal sports betting grew by 42.4%, generating $3.24 billion. New market entries in states like Kentucky, Maine, North Carolina, and Vermont were instrumental in driving this growth. As more states embrace regulated online gaming, operators are reaping the rewards of broader consumer access.

David Forman, Vice President of Research at the AGA, highlighted the shift: “More than a quarter of commercial revenue now regularly comes from online sources, raising the importance of continued sustainable growth with consumers in those states.”

The 29% share of total revenue attributed to online gaming represents a significant leap compared to prior years, signaling an ongoing transformation in consumer preferences. As technology evolves, operators are investing heavily in mobile platforms and user experience, making gaming more accessible to a wider audience.

Traditional Casinos Face New Challenges

While online gaming soared, brick-and-mortar casinos saw a slight decline in revenue, which contracted 0.9% year-over-year to $12.38 billion. Despite this, new casino openings in several regions provided a buffer to counteract the broader slowdown. This reflects the challenges traditional venues face in maintaining relevance amid the rise of digital platforms.

However, physical casinos remain critical to the industry, accounting for the majority of gaming revenue. These establishments continue to draw patrons with entertainment options, dining, and hospitality services that online platforms cannot replicate. Industry analysts suggest that traditional casinos must innovate and diversify their offerings to remain competitive in the long term.

On Track for a Record Year

Year-to-date revenue for the first nine months of 2024 reached $53.24 billion, an 8% increase from the same period in 2023. If this trajectory continues, 2024 is poised to become the fourth consecutive record-breaking year for the U.S. commercial gaming industry. This performance reinforces the sector’s role as a robust driver of economic growth and state-level tax revenue.

Gaming operators contributed $3.79 billion in taxes during Q3, an 8.9% increase from the previous year. This growing contribution underscores the industry's importance to state and local governments, particularly as gaming becomes a significant source of public funding in many jurisdictions.

Q3 2024 continued gaming’s momentum from the first half of the year, with online casino and sports betting driving strong growth.

Future Outlook

Looking ahead, the U.S. gaming industry faces a dual challenge: sustaining growth in the online sector while preserving the appeal of traditional gaming venues. The continued expansion of regulated markets and advancements in technology are likely to further boost online gaming’s share of the revenue pie. However, regulators and operators must balance this growth with responsible gaming measures to ensure long-term sustainability.

Meanwhile, traditional casinos may need to embrace hybrid models, integrating digital elements to enhance their offerings. By doing so, they can appeal to a new generation of players while retaining their core customer base. As the industry evolves, its ability to adapt will determine whether the current streak of record-breaking years continues into the future.