State Revenue from Online Casinos in the US Is Steadily Increasing
America’s relationship with online casinos is changing, with forward-thinking states choosing to embrace the option to legalize and license this industry. Part of the reason that regulators have been increasingly keen to legitimize this area is that it is hugely profitable as well as widely popular, meaning that opportunities to generate tax revenues from it are hard to resist.
In the handful of states where online casinos are allowed to operate, this tactic is already proving effective, with steady increases in revenue helping to fill the public coffers.
One thing that is important to remember about the best online casinos in the USA ranked here is that every one of them has to be owned by an operator with a land-based presence in the state in question.
While other regions of the globe allow pure-play online casinos to be licensed, it is the link with bricks-and-mortar brands that not only gives US casinos more legitimacy and recognition in the eyes of consumers but also makes it easier for them to be regulated and taxed.
Big names like MGM and Caesars have already leaped at the chance to be amongst the frontrunners in this explosively expanding market.
Regulators may soften their stance even further and eventually open up the industry to all comers, although for the time being this seems unlikely.
Impressive Momentum & Revenue Generation Strategies
Many industry reports and studies are looking into the performance of the online casino market in the US, most of which focus chiefly on the business side of the equation.
Stats from Research and Markets predict that double-digit growth will be enjoyed year on year for the next half-decade, with spending rising by 15.41 percent annually until at least 2025.
This covers the small but not insignificant number of states that have taken the impetus to legalize online casinos within their borders, including Nevada, Pennsylvania, and New Jersey.
In New Jersey alone, over $225 million is being generated by the industry each year, and it is worth considering the way that this state in particular approaches bringing in revenue for public spending from the online casinos it allows to function.
To even apply for a license to run an online casino, operators must hand over $100,000. Then there is the $400,000 initial fee for licensing, from which the initial application fee can be deducted if the application is successful. Once an online casino is up and running, it must pay a further $250,000 to the state each year to maintain its gaming permit; without this, it would no longer be legally allowed to provide services to customers.
Similar strategies are put in place in the other states that support online casinos, so even if operators do not make any taxable revenues whatsoever, the authorities are guaranteed a relatively small but certainly not insignificant amount of cash out of the arrangement.
Of course, these casino sites are indeed generating tens or even hundreds of millions of dollars every 12 months, and this will only increase as time passes if analyst projections are accurate. This means that states like New Jersey will not only be able to tax the earnings of entire companies, but also generate revenue for the public purse based on the income taxes paid by casino employees. As these sites swell, they will need more staff to keep them up and running, hence the economic heft they hold as a whole is not to be underestimated.
Another aspect of the US online casino market that cannot be ignored at the moment is the role that COVID-19 is having on the growth of the industry.
Experts at Grand View Research state that the pandemic has been good for casino sites, for the simple fact that people are unable to leave home to visit land-based casinos in many parts of the country, and have thus been forced to take a look at online alternatives that they might have ignored or been unaware of in normal circumstances.
The tie-in between bricks and mortar casinos and online brands has been positive for the industry as a whole in this context since casinos with physical premises have been able to make up for the drop in revenues seen at these venues thanks to earnings generated online.
So the online casino market looks set to continue proving itself worthy both for operators and the state economies in which these sites are available, perhaps paving the way for more widespread acceptance across the US soon.
This article has been published in accordance with Socialnomics’ disclosure policy.