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Michigan, New Jersey iGaming revenues hit new highs in September 2021

New Jersey & Michigan iGaming revenues hit new highs in September 2021 - but did the record numbers come at the expense of land-based casinos? And which casinos now enjoy the biggest market share?

Michigan iGaming revenues in Michigan topped $100m for the first time in September, with the online casino vertical raking in $102m. It was a similar story in New Jersey, with record revenues of £122.6m for the month (up 40% YoY, and 5% from July).

Simon Flynn from Casinosformoney.com dug into the numbers from the MI and NJ regulators to find potential answers to the most burning questions in the US online gambling industry.

Which online casinos now enjoy the largest market share in each state?

In MI, BetMGM remains the leader, with a 39.7% share. That is more than double the pairing of DraftKings and Golden Nugget (which merged in the summer) with 19.7%. The FanDuel/Fox/TSG brands came third with 17.9%, while Rush Street’s BetRivers brand came in with just 6.5% market share.  The remainder of the MI online casino market share was taken up by the likes of Caesars, Twinspires, and WynnBET.

It was a roughly similar story in NJ, with Borgata/BetMGM (31.2%) on top, followed by Golden Nugget (25.3%) and Resorts Digital (which DraftKings operates in this state) on 23.2%.

The top 3 in both states remained the same between 2020 and 2021.

Golden Nugget passes the billion-dollar lifetime revenue milestone in NJ

In September, Golden Nugget Online Gaming (GNOG) became the first online casino brand to achieve $1bn in lifetime revenue from the state of New Jersey. With such a strong brand, you can now see why DraftKings were so eager to snap up Tilman Fertitta's online business in the summer.

Did the record revenues for iGaming come at the expense of land-based casino activity?

Not in NJ, for sure. In fact, land-based casinos in the Garden State also enjoyed a record month of $248.5m in September – up 30.4% year on year.

How did online sports betting fare in the month of September?

September saw the resumption of the NFL, America’s favorite sports league to watch and to bet on. As would be expected, online sports betting saw an immediate resurgence after a slow summer. Michigan’s revenue numbers on sports almost doubled from $192m in August to $354m in September, and NJ’s numbers jumped from $612m to $918m.

In New Jersey, the online sports betting market is now ten times larger than the retail channel – with revenues of $918m against $93m. Overall, NJ sports betting in 2021 has passed the $1bn mark, earlier than ever before.

Interestingly, gross margins were on the modest side – just 6.4% for the month of September, against 7.4% for the year overall. Perhaps gamblers may have been reasonably successful at accurately handicapping the NFL in the early part of the season. But perhaps the tough competition in New Jersey for online sports betting fans has seen more and more bookmakers "reduce the juice" in search of market share. We have seen the juice on most NFL games regularly fall below 4% so far this season, suggesting that competition works in gambling in the same way that it does in every other business. We hope state regulators are paying attention.

Important Takeaways

It's possible to draw a number of takeaways from these September numbers

  • The experience of New Jersey shows that the online casino vertical does not undermine the business model of land-based casinos. We hope this lesson is not lost on the board of Las Vegas Sands, which remains the one large hold-out against legal online casinos in the state of Nevada
  • Online casino revenue streams may be smaller than those from online sports betting - but they are less affected by seasonality. It's notable that sports betting handles in the US dipped all summer, and needed the NFL to resume to reach the record highs we saw in September. Online casino revenues on the other hand continue to grow larger month on month, rain or shine.
  • Competition helps consumers. We previously saw evidence of this by comparing the bookmaker's juice on NFL games between this season and last. This sample of data seems to be confirmed by the modest Gross Gaming margins of sportsbooks in September. Let's hope that legislators in states such as New York, Florida, and California keep the importance of competition in mind when they come to decide how many gambling licenses will be awarded in their states.
  • A strong brand plays a critical role in the success of an online casino. The fact that the 3 largest casinos by market share in September 2020 were still in the top 3 in 2021 shows that brand loyalty is more important than short-term teasers such as bonuses. And Golden Nugget's landmark $1bn lifetime revenue in the state of New Jersey adds further evidence that a strong brand is vital to success in the US online casino market.

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