The U.S. commercial gaming industry witnessed its fourth consecutive month of slowing growth in May, as per the American Gaming Association data. Nonetheless, online gaming emerged as a silver lining amidst the general deceleration.
A Closer Look: Digital Gaming Vs. Traditional Gaming
Despite the slowdown, May’s gross gaming revenue rose 6.4% from the previous year to a substantial $5.49 billion.
The cumulative GGR for the initial five months of 2023 saw a steeper ascent, rising 12.4% to total a hefty $27.59 billion. However, this growth trend appears to be diminishing from the over 20% year-on-year surge recorded back in January 2023.
Despite the overall slowing pace, two sectors displayed a remarkable uptick: sports betting and online gaming. Sports betting witnessed a spectacular rise of 41.5% in May, reaching $864.1 million.
Simultaneously, online gaming saw a 22.4% spike, hitting $498.4 million. From January through May, total revenues from these sectors surged ahead of last year’s figures by a whopping 64.9% and 22.3% respectively.
Contrarily, traditional gaming forms such as slots and table games saw less remarkable movements. Slot revenues marginally increased by 1.3% to hit $2.98 billion, maintaining its dominant position.
Conversely, table game revenue slipped 4.8%, landing at $834.3 million in May.
Shifting Player Preferences: Digital Platforms Gain Ground
The data points towards an undeniable shift in player preferences from land-based gaming to digital platforms. Land-based gaming revenue saw a 0.6% dip in May, whereas online gaming GGR soared by a substantial 43.4%. This robust growth can be largely attributed to the introduction of online sports betting in Kansas, Maryland, Massachusetts, and Ohio.
In terms of May’s sports betting revenues, New York took the top spot with $153 million, followed by Illinois with $89 million, and New Jersey at $82 million.
Interestingly, Massachusetts and Ohio, two of the newest entries, found themselves among the top five revenue-earning states, raking in $62 million and $58 million, respectively.
Traditional Casino Games Lag: Implications for the iGaming Industry
- Embracing the Digital Shift: The ascendance of online gaming emphasizes the industry’s urgent need to evolve, requiring traditional operators to redirect investments towards digital operations within the iGaming industry.
- Expanding Geographical Footprint: The entry of new states into the sports betting market intensifies competition and presents a more diversified customer base to gaming companies.
- Diversifying Revenue Streams: The waning growth in conventional gaming sectors underscores the necessity for operators to explore varied revenue sources like sports betting and online gaming.
- The AGA reports the slowdown marks the end of COVID-related year-over-year growth impacts, leading to varying performances across state markets. With the spotlight on bolstering digital offerings to capitalize on a growing user base, the industry aims to counter the decelerating growth in traditional sectors.