Sports betting hits record $11B in 2023 revenue

As the American sports betting industry continues to expand, it has reached a high water mark, posting a record $10.92 billion in revenue for 2023, according to the American Gaming Association's annual report.

The huge year for the industry represented a 44.5% year-over-year increase from 2022, which previously held the record. A handle of $119.84 billion (a 27.8% year-over-year increase) combined with an increased year-over-year sportsbook win percentage of 9.1% (up from 8.1% in 2022) contributed to the record.

AGA notes that these figures are all without Arizona (November) and Kentucky (November and December) reporting their most recent data.

Another key factor was the addition of five new legal betting states -- Kentucky, Maine, Massachusetts, Nebraska and Ohio -- all going online in 2023. Ohio has quickly established itself as a sports betting hotbed, bringing in $936.6 million to rank as the fourth-highest-earning state in the country. The five new states combined to bring in $1.49 billion last year.

Meanwhile, New York maintained its dominance at the top of the leaderboard by accumulating $1.697 billion in 2023 revenue, while New Jersey ($1.007 billion) and Illinois ($1.002 billion) each eclipsed $1 billion in annual revenue for the first time.

Aside from the yearlong numbers, the sports betting industry also posted a record quarter by bringing in $3.41 billion in revenue in the fourth quarter of 2023 -- a 30.8% increase from the fourth quarter of 2022 and a 19.6% increase from the record set in the first quarter of 2023.

Another quarterly record could be on tap. The AGA projected that Americans would bet $23.1 billion on Super Bowl LVIII, and Nevada ($185.6M) and New York ($162.2M) already reported enormous numbers from the game. With North Carolina launching legal online sports betting in early March -- just in time for March Madness -- a new record quarter for Q1 2024 seems all but assured.

While another record year could also be in store for 2024, the industry is wary of the notable slowdown of states legalizing.

"I think we're in some ways victims of our own success over the past five years in that we now have 38 states plus DC that have already taken the step of legalizing and regulating sports betting, so there's a lot fewer states left on the board," AGA senior vice president of government relations Chris Cylke told reporters Tuesday. "Some of them have pretty significant political challenges in terms of getting sports betting itself enacted.

"When we look at the map, there could be potentially two or three states that have some activity and get it across the finish line this year. There could be zero, which would be disappointing, but that's where we are right now with the progress that we've made over the past almost six years."

Overall, the American gambling industry -- which also includes land-based casino gambling and internet gambling -- had a record year, posting $65.52 billion in 2023 revenue, a 10% increase from 2022's record. Land-based gambling alone brought in $50.02 billion, a commanding 75.3% of all revenue.

AGA also touts that gambling taxes generated $14.4 billion for state and local governments in 2023.