US Sports Betting Hits Record High with $10.92 Billion Revenue in 2023

US Sports Betting Hits Record High with $10.92 Billion Revenue in 2023
Cover Image Source: The betting line and some of the nearly 400 proposition bets for Super Bowl 50 | Getty Images | Photo by Ethan Miller

The American sports betting industry is experiencing unprecedented growth, reaching new heights by generating a staggering $10.92 billion in revenue for the year 2023, as reported by the American Gaming Association (AGA) in its annual report.

This extraordinary achievement marks a remarkable 44.5% year-over-year increase from 2022, which had previously held the record. The record-setting revenue was fueled by a handle of $119.84 billion, reflecting a substantial 27.8% year-over-year increase. Additionally, there was an uptick in the year-over-year sportsbook win percentage, rising to 9.1% from 8.1% in 2022, contributing significantly to the industry's record-breaking performance.

Sports bettors mark their selections on a Parlay Card at Caesars Palace Race & Sports Book | Getty Images | Photo by Bob Riha, Jr.
Sports bettors mark their selections on a Parlay Card at Caesars Palace Race & Sports Book | Getty Images | Photo by Bob Riha, Jr.

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It's worth noting that these impressive figures exclude data from Arizona and Kentucky for November and December, as they have not reported their most recent data. Sports betting involves placing bets on sporting events to win a specified sum if the chosen team or individual emerges victorious. The market is segmented by type (Live/In-Play, Fixed Odd Betting, Exchange Betting, Daily Fantasy, Spread Betting, Pari-Mutuel, Other Types), sports type (Football, Basketball, Baseball, Horse Racing, Cricket, Hockey, E-Sports, American Football, Other Sport Types), and platform (Online, Offline).

A pivotal factor in this surge was the inclusion of five new legal betting states – Kentucky, Maine, Massachusetts, Nebraska, and Ohio – all entering the online betting arena in 2023. Ohio, in particular, quickly established itself as a sports betting hub, generating $936.6 million in revenue and securing the fourth-highest-earning state position. Collectively, the five new states amassed $1.49 billion in revenue last year.

New York maintained its stronghold as the leader, boasting $1.697 billion in revenue for 2023. Notably, both New Jersey ($1.007 billion) and Illinois ($1.002 billion) surpassed the billion-dollar mark in annual revenue for the first time, solidifying their positions in the upper echelons of the sports betting landscape.

Sports betting guests to Caesars Palace Race & Sports | Getty Images | Photo by Bob Riha, Jr.
Sports betting guests at Caesars Palace Race & Sports | Getty Images | Photo by Bob Riha, Jr.

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Apart from the annual records, the sports betting industry also witnessed a record-breaking quarter, raking in $3.41 billion in revenue during the fourth quarter of 2023. This represents a substantial 30.8% increase from the fourth quarter of 2022 and a noteworthy 19.6% surge from the record set in the first quarter of 2023.

The AGA projects the possibility of yet another record quarter, as Americans were anticipated to wager $23.1 billion on Super Bowl LVIII. Notably, Nevada ($185.6 million) and New York ($162.2 million) reported substantial numbers from the game. With North Carolina set to launch legal online sports betting in early March, just in time for March Madness, the AGA anticipates another record-breaking quarter for Q1 2024.

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Chris Cylke, AGA's senior vice president of government relations, acknowledges the industry's immense success over the past five years, with 38 states plus DC legalizing and regulating sports betting. However, he highlights potential challenges, stating, "Some of them have pretty significant political challenges in terms of getting sports betting itself enacted."

The sports betting market has witnessed significant growth, projected to reach $114.68 billion in 2024 with a CAGR of 5.2%. The historic growth is attributed to increased sports events, a rising millennial population, higher disposable income, and increased smartphone and smart computing device usage. The market is expected to maintain steady growth, reaching $137.48 billion in 2028 with a CAGR of 4.6%. Anticipated drivers include a focus on virtual sports betting, product innovations, 5G network adoption, mergers and acquisitions, urbanization, and increased internet penetration.

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