Good sports: Sports betting bouys Q1 gaming revenue results
Sports wagering helped the gaming industry overcome economic headwinds, spurring overall revenue growth for first quarter 2019
During the first quarter of 2019, the U.S. commercial gaming industry generated $10.5 billion in gaming revenues, up 3.4 percent or $345.6 million from the first quarter of 2018.
The strong growth in revenues caught many analysts by surprise, as the industry faced numerous economic obstacles. During the first quarter of 2019, the industry was able to overcome the longest federal government shutdown in U.S. history, a decline in the average tax refund and March casino closures along the Ohio and Mississippi Rivers due to another year of flooding. The ability to overcome these headwinds was largely attributed to the increase in gaming revenues in those states that had legalized and begun offering sports wagering.
At the end of March 2019, six states had legalized and started to offer sports wagering, since the U.S. Supreme Court opened the door to legalized sports wagering outside of Nevada with the May 2019 decision to overturn the Professional and Amateur Sports Protection Act (PASPA). These six states collectively generated $91.1 million in gaming revenue from sports wagering during the first quarter of 2019. However, what is most notable is that these six states also experienced a $193.3 million increase in traditional gaming revenues during the same time period—collectively, the six states that offered sports wagering saw their combined revenues increase by 11.2 percent.
While sports wagering is not a significant moneymaker on a stand-alone basis, the complimentary nature of it to other forms of gaming is a trend that’s catching on nationwide.
Beyond the legalization of sports wagering, market expansion in Massachusetts and New York also led to an increase in gaming revenues. In the first quarter, both Massachusetts and New York benefited from new casinos that were not open during the prior year period. These new casinos contributed to an additional $114.3 million in gaming revenues.
As the year progresses, we anticipate even more changes in the industry. To learn more about gaming, take a look at our 2019 gaming statistical analysis, available on our website rubinbrown.com, which captures trends within the industry and predictions for the future.