Despite what people living outside of the US think, America has always had a somewhat legally strenuous relationship with casino gambling. Just because Nevada generates, in an average year, over $11 billion in gaming revenues, that does not mean that other US territories share its enthusiasm towards this activity, nor its laws. On the contrary, many still do not allow commercial gambling establishments, and things get even more tightly regulated in the digital sphere. However, all that is changing due to a myriad of reasons.
It is important to note that US residents have had the option to bet on games of chance over the internet since this industry sprung up in 1994. Naturally, at the start, that was only possible at offshore betting sites. Such platforms first appeared in several Caribbean nations that allowed this practice. It was not until 2013 that New Jersey legalized online gaming by bringing forward a revised internet gambling bill on February 26, 2013. That move got allowed via a December 2011 Justice Department interpretation of the Federal Wire Act of 1961, which stated that this law only applied to interstate sports betting and not casino games. The Act was the federal barrier that stopped US states from regulating online gaming as they saw fit. With it out of the way, New Jersey led the legalization charge. Nonetheless, only Delaware, West Virginia, Michigan, and Pennsylvania have followed suit thus far.
Still, there is a noticeable gaming climate change in the US, with a propensity for this pastime to only get more popular. A recent survey conducted by the American Gaming Association showed that 70% of Americans trust the online casino industry slot games. They believe that the entities operating in this sector act responsibly, give back to the community, and provide a positive economic impact. Thus, as the perception of this activity and sphere improves, social acceptance for gambling as a business will undoubtedly follow.
Can Gaming Reproduce the Economic Impact of Sports Betting?
In 2018, the US Supreme Court did away with The Professional and Amateur Sports Protection Act, overturning this law that effectively outlawed sports betting throughout the country. Once that happened, multiple US states instantly passed laws that allowed retail and online sportsbooks to operate within their borders.
Per-2018, the American Gaming Association estimated that over $150 billion in sports bets get placed in the US each year. That said, some experts claim that a more realistic projection should fall in the $50 billion to $60 billion range. Today, there are thirty states where sports betting is legal, with eighteen territories allowing online sportsbooks to run. That means that over one hundred million Americans live in a place where they can legally wager on sporting events. The activity generated around $3.2 billion in annual revenues in 2021, not counting the year’s last two months. That is a 230% increase from the 2020 number for that same period.
Of course, the online casino gaming market is not as developed but still manages to rake in impressive numbers. New Jersey continues to break its revenue records virtually every month as this sector’s most substantial US player. In 2021, the Garden State announced that it raked in $1.4 billion in gross online casino gaming revenues. That is an increase of 40% compared to the 2020 figure, contributing almost $240 million to state and local coffers via taxes. In December 2021, Pennsylvania’s online casino and poker rooms set a monthly record by producing $127 million in gross gaming revenues. That is a ten million dollar improvement over the former milestone. And Michigan did excellently in its first year allowing online casino games, as these products brought in revenues of $1.1 billion in 2021.
Even though not nearly as many states allow internet gaming, it is undeniable that this section of the online industry flourishes far faster than sports betting.
Foreign Operators See Potential in the US Market
Global online casino gaming is growing at a compound rate of 11.4% per year. Expectations are that the integration of blockchain and AI technology will act as the industry’s principal drivers, fueling it at the same level as smartphone adoption and increased internet penetration did in the past.
Isle of Man’s software gaming developer Playtech recently made massive strides to expand its US reach. Thanks to a deal with British-based operator Bet365, which functions in New Jersey, and an agreement with Parx Interactive in Michigan, in late-2021, Playtech became the first brand to launch two live casinos on the same day in the US, in these two respective states.
Sweden’s streaming game juggernaut Evolution also operates in New Jersey, and it is monitoring the legal situation in other US states for any potential developments to grow in North America.
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