2024 US Gaming Industry Trends

Despite persistent inflation, demand in the US gaming industry remains strong—especially in iGaming wagering and sports betting. In fact, US commercial gaming revenue growth has averaged 9.3% over the past six quarters, surpassing US GDP growth each quarter. This trend may be unsurprising, given the increasing legalization of the betting landscape across the nation.

With a deeper understanding of the latest gaming industry trends, institutional investors can make better investment decisions. Our Morningstar researchers take a closer look at the Q2 2024 gaming landscape, including sports and iGaming dynamics, industry outlooks, and more.

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There’s ongoing strength in US sports and iGaming wagering along with lasting demand in Las Vegas betting, providing growth drivers for the domestic gaming industry this year. Still, shares of Morningstar’s US-listed gaming coverage have dropped year to date, due to angst over US sports and iGaming market competition and regulatory changes—as well as decelerating growth in US physical casinos after their strong demand recovery in 2021-23.

In this vein, shares within our coverage were down 7.5% on average year to date through June 14, on a market-cap weighted basis versus the 10% lift for the Morningstar Global Markets index. As such, 100% of our gaming-related coverage traded in 4- or 5-star territory.

Despite an ominous consumer macroeconomic environment, US commercial gaming revenue growth has averaged 9.3% over the past six quarters, compared with just 2.1% for US GDP during that time.

We think this speaks to the enduring consumer demand for gambling activity. And considering the low barriers in obtaining a gaming license in the US, the region plays host to about 1,000 total commercial and tribal physical casinos. Amid this competition, gaming operators need to renovate their existing physical assets at least every few years and build new casino resorts to compete for visitation.

Las Vegas’ share of US commercial gaming revenue has held steady at around 20% the last six quarters, as the region adds sporting and entertainment events that attract visitation and wagering. Meanwhile, sports and iGaming sales share has increased to high teens and low-double-digits in the first quarter 2024 versus mid-teens and high-single-digits at the end of 2022, aided by further state and user adoption.

This city’s trends are specifically important to MGM, given that we estimate 53% of its revenue in 2024 will come from the region. Outside of Vegas, other US regions collectively make up 84% of Penn’s modeled 2024 sales, 51% of Caesars’, and 21% of MGM’s.

Sports betting is already legal in 38 US states, which encompass about two-thirds of the adult population. Based on our analysis of the legislative process, we forecast seven additional states to allow athletic wagering by 2027, reaching nearly 90% of the adult population.

Of these seven states, Texas represents the largest opportunity with 8%-9% of the country’s total population—driving our industry revenue growth forecast to about $23 billion in 2027, an increase from around $11 billion in 2023. Plus, we forecast US gaming revenue growth to continue in 2024-26, buoyed by US sports and IGaming.

As the gaming landscape continues to evolve, it’s important for you to make informed decisions. When you know the latest trends, you can help your organization better invest in the industry.

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