The American obsession with online sports betting continues unabated, as figures released Wednesday by the American Gaming Association (AGA) for May show retail and mobile sportsbooks reported revenue of nearly $488 million for the month.
Overall gaming revenues from commercial land-based casinos, sportsbooks, and internet casinos rose to $5.03 billion in May, an increase of 7.9% from the same period last year, setting a record for the month and making it the second-highest month in history.
In addition, 18 of the commercial gaming states that were operational a year ago saw growth in their May revenues compared to May of 2021, the AGA said.
For the first five months of 2022, the AGA, the Washington-based group representing the U.S. gaming industry, reported that total sports betting revenues were $2.64 billion, an impressive gain of 73.5% from the same period last year. Those numbers have been helped by the addition of online sports betting in New York, among other things.
In March, April and May, gaming revenues exceeded $5 billion in each month and now rank as the three best gaming months in industry history.
Clouds on the horizon
All these results came ahead of record-high U.S. inflation figures for June, which soared to 9.1%, the highest 12-month increase in 40 years, and an increase from 8.6% in May.
The figures shocked economists and financial-market analysts and led to growing fears of a recession as the U.S. Federal Reserve Board continues to raise interest rates to stem the inflationary spiral.
Bill Hornbuckle, CEO of MGM Resorts International, speaking at CNBC’s Evolve Global Summit on Wednesday, said that he expects inflation and rising gas prices will eventually impact total wagering and earnings, although thus far the impact has been negligible.
"What’s happened over the last 18 months has literally been historic, but if you look at how we thought we would be performing against how we are performing, we’re exactly where we thought we would be,” Hornbuckle said.
Another positive development reported by Hornbuckle and MGM Resorts (which is a part-owner of BetMGM) was the rising number of millennials who are flocking to its casinos in record numbers. He attributed the increased participation amongst this younger target group to the COVID-related introduction of pods and new gaming floor configurations.
"It’s brought millennials to the table in a way that they have not been before in this industry. We have more millennial business than we’ve ever had by 20%,” Hornbuckle said.
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However, this rise in millennial casino wagering may also be due in some measure to the growing acceptance and enthusiasm for legal sports betting in the U.S., especially among younger generations of bettors who have been subjected to an onslaught of ads promoting major sportsbooks.
The level of promotion seems unlikely to taper off, as online sportsbooks such as FanDuel and DraftKings continue to fight for market share and are bankrolling a campaign to convince California voters to approve a bill that would legalize online betting in that state.
Apart from the release of the May gaming figures, the AGA has also issued a call for the federal government to crack down on illegal offshore gambling websites. Although the rollout of online betting across the U.S. has cut into offshore wagering, there are still significant amounts of illegal wagering activity that the major sportsbooks hope to bring stateside.
An AGA survey found that more than half of gamblers say they still wager using offshore sites.
"Offshore gambling websites are a significant threat to consumer protections and the economic benefits legal gaming provides for communities across the country,” said Bill Miller, president and CEO of the AGA, in a press release. "Eradicating these websites and all forms of illegal gambling is one of AGA’s top priorities."
