In recent months, DraftKings and its subsidiary Golden Nugget have been witnessing significant market share fluctuations, particularly within the US online casino sector. This trend is notably pronounced in Michigan, where Golden Nugget Casino experienced a substantial revenue increase in May, nearly tripling its figures after a 60% decline in the previous month. This dynamic interplay between the two entities has captured the attention of industry analysts.
The US online casino industry generated approximately $678 million in revenue in May, factoring in estimates for Rhode Island, the only state yet to report its monthly figures. Traditionally, the summer months witness a revenue decline from April to July. This year, the dip was sharper than usual in April, with a 5.3% decrease in daily average revenue, but it stabilized in May, aligning with typical expectations for both months combined.
Surpassing Revenue Projections
According to the PlayUSA iGaming market forecast, the industry was projected to earn just under $3.2 billion by this point in 2024. However, the sector has consistently outperformed these projections, accumulating a total of $3.3 billion to date. If this pace is sustained, the total revenue for the year could exceed $8 billion, showcasing a robust performance across the board.
Golden Nugget’s Market Swings
Golden Nugget’s revenue in Michigan has seen dramatic fluctuations this year. After a 27% drop in February, there was a 56% rebound in March. The subsequent months continued this roller-coaster trend, resulting in Golden Nugget’s market share reaching 4.4% in May, its highest since August 2023. This is a significant recovery from an all-time low of 1.5% in July 2023.
The causes behind these swings remain unclear, but they seem to be correlated with opposite movements at DraftKings Casino, which experienced notable market share declines in March and May, and a surge in April. This pattern suggests a possible strategic maneuver by DraftKings, perhaps involving the reallocation of promotional budgets between its brands.
Regional Revenue Highlights
Pennsylvania
Pennsylvania’s online casinos and poker rooms reported $216.5 million in revenue for May 2024, marking a 27.1% year-on-year increase. The daily average revenue of $7.0 million represented a slight 1.3% decline from March, mirroring the national trend of a softer decline compared to April. Pennsylvania remains closely aligned with PlayUSA’s revenue projections, being ahead by 0.6% year-to-date.
Michigan
Michigan’s online gambling sites generated $198.6 million in May, narrowly missing their second-ever $200 million month. The state saw an annual growth rate of 31.9%, the highest since November 2022. Michigan’s daily average revenue held steady at $6.4 million, outperforming projections by 9.7% and potentially reaching $2.3 billion for the year. While DraftKings faced a 12% decline, Golden Nugget and FireKeepers experienced significant gains.
New Jersey
New Jersey’s online casinos and poker rooms earned $192.1 million in gross revenue in May, with a steady annual growth rate of 19%. The daily average revenue of $6.2 million was slightly down by 1% from April. New Jersey has been consistently beating revenue forecasts, exceeding expectations by 7.3% in May and 5.6% year-to-date. Despite some market share losses for BetMGM, DraftKings saw an increase of one full percentage point.
The Broader Picture
Connecticut
Connecticut’s two online casinos reported combined revenues of $46.3 million in May, reflecting a 41% year-on-year increase. The daily average revenue of $1.5 million was up by 8.1% from April, beating projections by 5.2%. Mohegan Sun and DraftKings maintained their market share split, with Mohegan Sun reducing promotional spending by 12%.
West Virginia
West Virginia’s online casino market produced $17.9 million in May, maintaining similar levels to April. The annual growth rate surged to 54.1%, the highest this year. Despite a 2.5% drop in daily average revenue due to the longer month, the state exceeded forecasts by 11.3% and is ahead by 8.7% year-to-date.
Delaware
Delaware’s online casinos, operated by BetRivers, saw gross revenue of $3.9 million in May. Although this marked a 15.0% decline in daily average revenue, it still represented a significant increase compared to the previous year.
Conclusion
The US online casino industry is experiencing an intriguing period of volatility and growth. DraftKings and Golden Nugget are central players in this dynamic environment, with their market share fluctuations drawing considerable attention. As the industry continues to outperform projections, stakeholders remain keenly focused on the strategies and trends driving these changes.
