Recent figures released by the American Gaming Association during Q2 2024 revealed sports betting proceeds of $3.16bn. Polling by the same trade body shows that 88% of sports bettors feel operators have their back in terms of encouraging responsible play. No one can deny that sports betting is on a high, and the longer that high continues, the fiercer competition in the industry becomes. Operators are focused on maintaining the balance of their profitability. Add to this the impact of marketing and advertising costs, as well as the effects of a range of taxation rates across the thirty-something markets and operators are facing increased challenges when it comes to maintaining the bottom line.
However, that push for profitability has seen iGaming spring out from a relatively niche vertical deployed in only a few states to a valuable tool in the US operator’s arsenal. Indeed, many of our operator partners who have already found a degree of success in iGaming are placing a strong emphasis on further developing and targeting new players and states looking for long term financial growth. With a clear avenue for cross sell between sports betting and iGaming (albeit in those states where it is legal) coupled with the increasing tech savvy average US consumer, gaining a strong foothold in iGaming is a huge advantage.
In the US, both the sports betting and iGaming verticals have seen significant growth in their respective revenue over the course of this year. In H1 2024, sports betting revenue reached approximately $3.66bn with the large majority of sports bets being placed online. Online gaming, which includes both iGaming and online sports betting generated approximately $5.04bn in the second quarter of 2024 alone. These numbers indicate a substantial contribution from online casino gaming as part of the total online gaming revenue. Overall, while sports betting continues to grow rapidly, online casino gaming still holds a larger share of the total revenue from online gaming as a whole.
Expansion in iGaming in the US is something that, if fully realised, could parallel or even exceed that of the expansion of sports betting, so the opportunity is clear to see
On a global scale, the latest data from H2 Gambling Capital shows that the global regulated online casino market is estimated to generate $32bn in gross gaming revenue in 2024, a figure projected to almost double to $63bn by the end of the decade.
Between 2024-29, global compound annual growth rates (CAGR) in iGaming are projected at a rate of 15%, rising to a figure of 20% when considering the North American market in isolation, and this is just based on the existing regulatory status quo being maintained, it does not assume any other states coming on board.
At the time of writing, seven US states have legalised online casinos, beginning with New Jersey, a real trailblazer and one of the big three iGaming markets, the others being Pennsylvania and Michigan, who have both seen success in the vertical since legalisation.
While online sports betting is regulated in far more US states, it is online casino which offers the more stable margins. Operators are agreeing distribution, development and in some cases M&A to catch or capitalise on cutting edge casino content, live casino and game development which they hope will enable the capturing of the competitive advantage in the market.
Indeed, increasing pressure on sports-led operators is something evidenced by the exit of several brands from the US market
This has added to our belief that demand for high quality online casino supplier relationships, such as those operated by Bragg, which can help operators manage the delivery of content, control the player journey and at the same time deliver profitability will only continue to grow in North America.
Considering the US market on its own, our share of the online casino market as a content provider to US operators is less than 1%. However, we’re already on track to double wagering in the US this year compared to 2023.
This year, in the US, we have taken an operator-centric approach and over the first half of 2024 we’ve reconnected with our customers to understand exactly how our content can deliver for their strategies.
We're continuing to refine our content roadmap to deliver for our customers, simultaneously we are expanding our reach, giving our new content launches greater impact. We are on track to be live with our newest content with all of the key operators, as well as with other US operator partners, taking us to approximately 90% coverage of the US market by the end of the year.
But what about the US market itself? Legislative initiatives were underway to legalise sports betting across five US states during the 2024 legislative session but failed to materialise. There’s been talk of New York and Maryland becoming the next states to legalise iGaming, with strong legislative appetites there, and potential initiatives likely in Indiana and Illinois, as well as Ohio.
The biggest advocate for expanding US iGaming is sports betting
Proliferation builds a customer base of interested bettors, and the demographic for those bettors is typically smartphone geared, technologically savvy individuals who don’t just want one vertical, but a myriad of options when spending their dollars.
As I’ve already explained, the marketplace is becoming more consolidated and less competitive, a status quo which cannot be maintained indefinitely. I imagine we will see more industry dollars being thrown into lobbying to expand both the sports betting catalog and ultimately the push for iGaming across the US
About Bragg Gaming
Bragg Gaming Group (NASDAQ: BRAG, TSX: BRAG) is an iGaming content and turnkey technology solutions provider serving online and land-based gaming operators with its proprietary and exclusive content, and cutting-edge technology. Bragg Studios offer high-performing and passionately crafted casino game titles using the latest in data-driven insights from in-house brands including Wild Streak Gaming, Atomic Slot Lab and Indigo Magic. Its proprietary content portfolio is complemented by a cross section of exclusive titles from carefully selected studio partners under the Powered By Bragg program. Games built on Bragg’s remote games server (Bragg RGS) technology are distributed via the Bragg Hub content delivery platform and are available exclusively to Bragg customers. Bragg’s flexible, modern, omnichannel Player Account Management (PAM) platform powers multiple leading iCasino and sportsbook brands and at all points is supported by expert in-house managed, operational, and marketing services. Content delivered via the Bragg Hub either exclusively or from the Bragg aggregated games portfolio is managed from a single back-office which is supported by powerful data analytics tools, and Bragg’s award-winning Fuze™ player engagement toolset. Bragg is licensed, certified, approved and operational in many regulated iCasino markets globally, including the U.S, Canada, United Kingdom, Italy, the Netherlands, Germany, Sweden, Spain, Malta and Colombia.
In the US Bragg has extensive partnerships with a wide range of US operators, including FanDuel, BetMGM, Bet365, Caesars, DraftKings and Rush Street Entertainment as well as many others. Bragg has a market reach of 70% in the US market in states including New Jersey, Pennsylvania and Michigan but is expected to increase that reach to 90% by the end of 2024. Bragg is also expected to more than double wagering on its products in the US during the same timeframe.
