US and UK IGaming industries see significant growth in time of economic instability
The US and the UK are both labeled as being key players in the iGaming market, both using the industry to support their respective economies. Here, we’ll look at how both markets are performing, and the economic benefits for each country’s economy.
UK iGaming industry paved the way
In the UK, online casinos have skyrocketed in popularity since the turn of the millennium – and, as such, revenue from online casinos has long since been a key element of economic success. Put simply, UK-based players can log in to online platforms to play live casino games like poker, blackjack, roulette or online slot games, to name a few. This consumer spending generates tax revenue for the UK treasury, creates further job opportunities as businesses expand, and thus encourages economic growth.
Let’s take a look at the numbers. In the 2022/23 financial year, iGaming alone generated $4.2 billion (£3.3 billion) in tax revenue for the UK government – an increase of $292 million (£230 million) from the previous year. In turn, this money can be then allocated towards public sectors such as healthcare, education, welfare, and emergency services.
iGambling tax revenue has generally seen a steady increase since 2000, now amounting to over double the figures seen two decades ago. That said, it did take a knock in 2020/21, before regaining its strength the following year. It is also estimated that iGaming will generate 15,000 jobs in the next few years in the technology industry alone – not to mention customer services, designers, and programmers.
Whilst the UK iGaming industry is more mature, the US iGaming is still in its infancy. Nevertheless, the US iGaming industry is seeing its own boom – especially over the last two years. So, how does the US iGaming industry compare to the UK’s, and what might it learn from a more mature market?
How does the US compare?
Over the past year, the US economy has been on the brink of recession. One aspect of the US economy that has continued to grow, however, is the commercial gaming industry, particularly the segment of iGaming. Despite many industries seeing a decline in growth and/or revenue, iGaming has continued to steadily rise over the past few years.
In the US, commercial gaming revenue amounted to $16.6 billion in the first quarter of 2023. This marks the eighth new quarterly high in a row, with a record-breaking $5.9 billion in gross revenue in March alone. Looking at iGaming specifically, this amounted to $1.48 billion of this overall gross revenue in quarter one. This highlights that the annual revenue of iGaming is seeing an increase of 22.7%.
In turn, overall commercial gaming generated its highest ever direct tax revenue for local governments in 2022, amounting to $13.48 billion, not including income or sales taxes, estimated to be billions more. This is an increase of 15.3% from the same time in 2021. The industry has also proven to improve local economic development and create thousands of jobs.
Though this boom is indeed promising, what the UK iGaming industry can teach the US is the importance of stable growth. Whilst the industry in the US has been growing rapidly over the last eight quarters, it remains to be seen whether this upward trajectory will be consistent, and signal long-term growth. Nevertheless, the US iGaming industry shows promise that it could follow in the footsteps of the UK iGaming industry, drawing in significant benefits for the overall economy.
