US egaming market worth $1.95bn by 2020, research shows
New study from Eilers Research values US egaming market significantly lower than previous estimates
The US online gambling market will be worth $1.95bn by 2020, a figure significantly lower than previous forecasts, according to new data published by Eilers Research.
The report entitled The US iGaming (Real) Opportunity claims the sector will “not be a transformational event” for many companies, and suggests estimates made by the likes of Goldman Sachs and Morgan Stanley “ $12bn and $7bn by 2017 respectively “ are extremely optimistic given that many states will initially be poker-only.
If accurate the valuation would see the US overtake Germany ($1.04bn), France ($1.43bn) and Italy ($1.17bn) in terms of market size by 2020, and even the UK ($1.6bn) if only online casino and poker are taken into account.
Based on other states following the same model as the recently-launched New Jersey market, it ranks California as the largest market in the US, worth around $1bn annually, with online poker generating $400m in revenue and casino $600m.
The second largest market would be Florida, worth around $500m, with New York the third largest market at around $400m.
New Jersey became the third state to launch regulated online gambling last month, following in the footsteps of Nevada and Delaware which launched earlier in the year.
“One of the fundamental flaws we have seen from most other market forecasts is they tend to assume all states will approve online poker and online casino games [which is] highly unlikely, not accounting for any type of ramp-up period, and not properly adjusting for the lack of online sports betting in the US,” the report stated.
Within regulated states it predicts bricks-and-mortar casinos will be the biggest beneficiaries, accounting for 70-80% of revenues, while platform providers (10-20%) and casino content suppliers and poker networks (10%-15%) also cashing in.
Multi-state casino operators such as Boyd, Caesars, Golden Nugget, MGM, Pinnacle, and Penn are cited as the main winners as regulated spreads across the country, along with prominent California tribes such as Pechanga, Pala, San Manuel and United Auburn.
According to the report, the states most likely to go live with egaming next are California and Pennsylvania, with another 15 states seriously considering regulating some form of internet gaming.