2024 US Gaming Industry Trends

Despite depleted savings, the appetite for gaming remains strong—especially in i-gaming wagering and sports betting. In fact, second-quarter industry digital sales were up 36%, spurred by factors such as sales growth in legalized states and recent state sports betting and i-gaming launches. US commercial gaming revenue growth has also averaged 9.1% over the past six quarters, averaging three times GDP growth during that time. This trend is expected to continue, with US sports and i-gaming industry sales anticipated to reach over $35 billion by 2027.

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 Q3 2024 gaming landscape, including sports and i-gaming dynamics, industry outlooks, and more.

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There’s ongoing strength in US sports and i-gaming betting along with lasting demand in Las Vegas wagering, 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 regulatory changes—as well as declining sales in US regional casinos after a strong demand recovery in 2021-23.

In this vein, shares within our coverage were down 16% on average year to date through Aug. 28, on a market-cap weighted basis versus the 13% lift for the Morningstar Global Markets index. As such, 83% of our gaming-related coverage traded in 4- or 5-star territory.

Despite an ominous consumer spending environment, US commercial gaming revenue growth has averaged 9.1% over the past six quarters, compared with just 2.8% for US GDP.

We think this speaks to the enduring consumer demand for gambling activity. This thirst for gaming may also be stoked by expanding legalization of sports and i-gaming betting and more types of wager offerings (in-game and casino play).

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 i-gaming sales share combined has increased to almost 30% in the second quarter of 2024 versus about 26% at the beginning 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, 50% 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 from around $11 billion in 2023.

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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