Amid Record U.S. Gaming Revenues, AGA Remains Focused On Unregulated Competition

February 21, 2024
The American Gaming Association reported commercial casino revenues topping $66m in 2023, a record amount for the third straight year, while policy priorities for this year are to lead on responsible gambling and to fight illegal gaming.

The American Gaming Association (AGA) reported commercial casino revenues topping $66m in 2023, a record amount for the third straight year, while policy priorities for this year are to lead on responsible gambling and to fight illegal gaming.

Responding to recent mainstream media criticism of sports betting and gambling addiction, AGA CEO Bill Miller insisted that the commercial gaming sector at large was fully committed to enhancing responsible gambling.

“Our industry’s commitment [to responsible gaming] is real and deep,” Miller told attendees of the AGA’s State of the Industry news conference on Tuesday (February 20). 

He said the AGA plans this year bring together members, advocates, regulators and other stakeholders to strengthen responsible gambling standards and improve communications to vulnerable players online or in brick-and-mortar casinos.

Miller added that the commercial gaming industry contributed $100m from gambling taxes last year to problem gambling funding.

Miller also made it clear to attendees on Tuesday that the AGA remains committed to shutting down the illegal gaming market that provides illicit competition to both land-based and online casinos and sports-betting platforms.

“Our fight is focused on both skill machines and offshore online websites,” he said.

Miller said the AGA was specifically focused on “fighting against 'skill machines' in places like Pennsylvania, Virginia and Missouri,” where networks of tens of thousands of gaming devices have proliferated in bars, convenience stores and other non-casino locations.

On Wednesday, a Virginia Senate committee will meet to discuss House Bill 590, a bill that would overturn a statutory ban on skill-game machines but apply a strict regulatory stance, notably by requiring city or county approval before any machines can be lawfully operated. 

The House Committee on General Laws separately passed a substituted version of Senate Bill 212 on Tuesday, which is a separate measure to regulate skill games. Both bills were filed in the General Assembly at the start of the session after the Virginia Supreme Court in October upheld a ban on the machines.

Pennsylvania Governor Josh Shapiro, a Democrat, included plans to impose a 42 percent tax on currently unregulated skill-game machines as part of his proposed fiscal year 2024-2025 budget. Republican state Senator Gene Yaw, who has introduced a bill to regulate the machines, has proposed a tax rate of 16 percent. 

Shapiro estimates skill games could generate $150m in tax revenue next fiscal year, and $313m the following year.

Miller remarked that the manufacturers of skill games have spent “ungodly sums of money” to convince legislators in each of those states that their machines are legal. He added that the AGA would not stop “until these skill-game manufacturers either play by the same rules we do, or they get shut down.”

Chris Cylke, AGA’s senior vice president of government relations, added that machine providers have used litigation to frustrate action by legislators and law enforcement to prevent state legislatures from enacting laws to clarify that their machines are gambling devices. 

Last year, Cylke said, there was some positive momentum with Kentucky lawmakers passing a skill-game ban and the Virginia Supreme Court upholding the state's earlier prohibition. But skill-game distributor Pace-O-Matic has sued to overturn Kentucky’s ban and is actively supporting the legislative efforts to regulate the games in Virginia.

It remains unclear whether the Virginia General Assembly will pass either of the two pending bills to regulate skill-game machines before lawmakers adjourn on March 9.

“We know the stakes for the industry are incredibly high, not only for operators in Virginia and Pennsylvania, because the outcomes in these states will likely impact how other jurisdictions grappling with this problem will choose to address it,” Cylke said.

Casinos Hit $66.5bn Revenue Record In 2023

Commercial gaming operations in the U.S. generated $66.5bn in total revenue in 2023, the industry’s best ever year, according to figures released by the AGA as part of Tuesday's news conference. That total was 10 percent higher than in 2022, which itself was a record year.

David Forman, vice president of research with the AGA, said when tribal gaming revenues are released later this year, total casino gaming revenue will likely reach $110bn. In 2022, combined revenues were about $107.4bn.

“That would make it a second straight year with commercial and tribal topping $100bn,” Forman said, noting that overall consumer spending on gaming in the U.S. in 2023 “was about the same as on beer.”

The AGA’s data found slot machines brought in $35.1bn in total revenue last year for an increase of 3.8 percent from 2022. Table games, including blackjack and roulette, generated $10.31bn in revenue, up 3.5 percent.

Sports betting generated $10.92bn in revenue in 2023 on handle of $119.84bn. Forman said five new sports-betting markets coming online in 2023 — Maine, Nebraska, Kentucky, Ohio and Massachusetts — contributed to the increase in revenue and handle.

Internet gaming posted revenues of $6.17bn, up 22 percent year-over-year. More than $5.5bn was generated by Michigan, New Jersey and Pennsylvania combined. Other states offering legal iGaming are Connecticut, West Virginia and Delaware, while Rhode Island launches iGaming on March 1.

Although Nevada may only offer online poker, it remains by far the nation’s largest gambling market, with $15.5bn in revenue last year, followed by Pennsylvania with $5.86bn and New Jersey with $5.77bn. New York was the fourth  largest commercial gaming market with revenues at $4.71bn, followed by Michigan with $3.58bn. 

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