AGA Reveals Pace of U.S. Sports Betting Growth with third-quarter Numbers

The American Gaming Association recently released numbers that show the steady rise of legal sports betting nationwide.

The pace of growth has blown away those who follow the path of the U.S. legal sports betting industry. This week, the American Gaming Association (AGA) released an earnings report for the first nine months of 2021. Those numbers have given credence to analysts' amazement about just how far the gambling industry has come in the U.S.

The post-COVID-19 world has come with heightened optimism around the legal gambling industry. But growth was already happening in America, as new states and providers have been joining seemingly every month, and would have done so with or without the coronavirus pandemic.

Either way, the AGA's report revealed the best quarter ever for the industry in terms of wagering activity and revenues. It represents an official pat on the back for an industry that's faced headwinds from gambling opponents and a pandemic that's continued on for 18 difficult months.

The Numbers

Legalized betting in the U.S. has experienced a major gold rush since the 2018 Supreme Court decision to overturn its blanket ban on sports wagering. Sports betting, gaming, and online casinos have experienced impressive growth over the last few years.

The American Gaming Association mostly compared the third-quarter numbers of 2021 to figures from the same period in 2019, as COVID-19 lockdowns severely hindered earnings in 2020, with casinos closing and sports leagues pausing globally.

The AGA's commercial gaming revenue tracker shows $13.9 billion in national commercial gaming revenues for the first nine months of 2021. That's a 24.7 percent increase from 2019, and a 53.8 percent spike from the third quarter of 2020.

Commercial casinos — a category that includes total revenues from casinos, sports betting, and iGaming — generated a staggering $38.7 billion during the third quarter of 2021, which eclipsed total revenues for all of 2020 and is an 18.5 percent increase over the third quarter of 2019. With the country slowly coming out of a COVID-19 slumber, fourth-quarter numbers should reflect a U.S. gambling scene that's heading into uncharted territory.

The Return of Retail Casinos

It's been a tough road for brick-and-mortar casinos nationwide the last couple of years, but there are certainly signs that life is returning to normal. Traditional casinos outpaced the handle and revenues of sports betting and iGaming platforms across the country during the third quarter - a good sign for the broader industry going forward.

“This marks the second consecutive record-setting quarter for the commercial gaming sector, and 2021 is on pace to be the highest-grossing year ever for our industry," association president and CEO Bill Miller said. "This is an impressive feat under any circumstance, let alone as we are emerging from the pandemic.

"Importantly, our comeback is being led by gaming’s traditional verticals as brick-and-mortar casinos saw record quarterly revenue. These gains are due in part to the steady return of travel and tourism, as well as the recovery of table game revenue, which had lagged behind the recovery of slots in previous quarters.”

What About Sports?

Sports betting in the U.S. is on fire. We have just about put a lid on September's contribution to the overall scene. With one state still to report, 10 states have broken handle records, and the second-best month ever was posted in another four states. Over $5.2 billion was bet on sports in September alone in America, by far the best-ever month for sportsbooks across the country.

Despite enduring a drought through the summer months, sports betting revenue hit $886.5 million in the third quarter, which represents a 153.1 percent year-over-year increase. 

Year-to-date sports betting figures have reached $2.74 billion, a staggering 306.5 percent increase from the first nine months of 2020, and that's 414 percent higher than the same period in 2019.

However, the third-quarter handle total came in as the worst in 2021, mostly due to the seasonal summer betting slumber. The $11 billion total U.S. sports betting handle during the last three months was lower than the $13.02 billion in the first quarter, and the $11.10 billion in the second.

iGaming

iGaming has become a valuable contributor to the eye-popping numbers the U.S. gambling industry is generating. Brick-and-mortar casinos are experiencing a major resurgence, and the increased popularity of online casinos is taking the iGaming sector to new levels.

iGaming grew a ho-hum 4.1percent from the second quarter to the third this year, generating $938.6 million in gross revenues. Keep in mind that the third quarter is traditionally the low season for the gambling industry, when backyard barbecues and weekends at the lake trump any sort of gambling activity.

The iGaming sector has generated $2.62 billion in revenues this year, which is an enormous 145.4 percent spike from the first three quarters of 2020. iGaming's figures are a staggering 650% higher than the same period from 2019. 

By the Time January Hits...

We'll be looking back on 2021 as the year jet fuel was poured on the U.S. legal gambling industry. More states came on board in 2021 than ever before, the country's sportsbooks will have generated more money than ever, and the most tax dollars will have been produced for needy state and local coffers.

The worst month in terms of monthly gaming revenue when looking back on 2021 will be February, when $4.4 billion was pocketed. Every other month in 2021 will have surpassed that impressive number.

Sports betting and iGaming have become staples for the overall gambling scene and will continue to grow into much larger contributors for the U.S. legal sports betting industry. So far in 2021, sports betting has been responsible for about seven percent of the industry-wide gross revenue. iGaming stands at about 6.8 percent.

Altogether, the arrow is pointing way up on the U.S. gambling industry as it continues its march toward the mainstream and becomes a worthy revenue generator for the states that host platforms.