American Gaming Association Ranks Michigan as Major US Gambling Market

Last year was a very good one for online casinos. In the six US states that have legalized online casinos, available data indicates that revenue was more than $6.5 billion in 2023. In addition, more than $1.6 billion was paid as state and local taxes.

Michigan online casinos contributed to the state emerging as a top contender, alongside Pennsylvania and New Jersey. However, while the Wolverine State has not had online casinos for as long as its peers, it nonetheless recorded an impressive gross revenue and tax revenue.

Currently, Michigan occupies second place in terms of gross online casino revenue, second only to Pennsylvania. Michigan posted a record $1.92 billion in revenue, marking a 21.6% jump from 2022’s record $1.58 billion.

The top three markets in terms of gross online casino revenue in 2023 are Pennsylvania ($2.1 billion), Michigan ($1.92 billion) and New Jersey ($1.92 billion). Pennsylvania is the clear leader of the pack with almost $182 million difference.

Michigan and New Jersey trailed each other with the former edging the latter with just over $115,000 more in gross online casino revenue.

However, according to the American Gaming Association (AGA), Michigan had a total revenue of $3.58 billion for all commercial gambling in 2023. This does not include yet-to-be-reported figures from Michigan’s 24 tribal casinos.

On the other hand, it is not surprising that Pennsylvania also topped the list for iGaming tax revenue for the state and local governments. This is as a result of high revenues and also the high tax rate on online slot games (54%).

The adjusted gross revenue (AGR) tells another story about the performance of these top contenders. AGR ranking for 2023 puts New Jersey at the top with $1.76 billion followed by Pennsylvania and Michigan with $1.74 billion and $1.73 billion respectively.

The Great Lakes State also came in second, still ahead of New Jersey, this time for tax revenue in 2023.  Pennsylvania tax revenue for the year was $745,467,307. In Michigan, it was $486,563,064 and $335,945,157 in New Jersey. Michigan’s 2023 iGaming tax revenue is a 21% rise from the previous year’s tax revenue.

Detroit casinos also made waves in the outgone year. The casinos retained the eighth position in the American Gaming Association’s ranking of the top 10 commercial casino markets by 2023 revenue.

This is despite suffering a 2.7% decline in revenue from $1.275 billion in 2022 to $1.24 billion in 2023. According to a note in the Gaming Revenue Tracker report, this slump was caused by workers’ strike.

For the year 2023, the top 10 casino markets by revenue are Las Vegas strip ($8.83 billion), Atlantic City ($2.86 billion), Chicagoland ($2.19 billion), Baltimore-Washington DC ($2.08 billion) and Gulf Coast ($1.59 billion).

Others on the list are Queens/Yonkers ($1.54 billion), Philadelphia ($1.37 billion), Detroit ($1.24 billion), St. Louis ($1.07 billion) and Boulder Strip ($964.7 million).

This positive development in Michigan, and Detroit, does not come with much surprise because of the AGA's report. Apparently, and according to the American Gaming Association, all “primary verticals” of the gaming industry across the US set revenue records in 2023.

According to the AGA, “casino slots and table games collectively generated $49.36 billion in revenue, a 3.3% increase compared to 2022”. The same report indicated that revenue from iGaming improved by 22.9% year-over-year while sports betting jumped 44.5% to hit $10.29 billion in revenue.

The total revenue generated from land-based casino games, sports betting, and iGaming in 2023 reached a record high $66.52 billion. This is a 10% increase over the record that was set in 2022.

Contrary to speculations that online gambling would negatively impact retail gambling, the report from the AGA indicates that in-person gaming is still a solid contributor to the industry.

In fact, the report shows that “commercial land-based gaming, encompassing casino slot machines, table games and retail sports betting, accounted for $50.02 billion, or 75.3%, of the total revenue in 2023.”

For the same year, state and local governments in the US collected approximately $14.4 billion in gambling taxes, marking a 9.7% increase from 2022.