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The Gold Rush put California on the map. Online casinos could do it again.
While California has been a kryptonite for all forms of online gaming, if legislators chose to legalize iGaming, the state would be the undoubted leader of the online casino states. And nothing would happen without approval from California tribes.
It’s going to be a hard sell in the Golden State, but the incredible revenue generated by California online casinos could eventually appeal to a state facing a $68 billion deficit in its 2024-2025 budget.
Seven states offer legal iGaming so far: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Combined, the states consistently bring in more than $600 million in revenue each month. Here’s a snapshot of how the market performed in July (the last month in which all seven states reported iGaming revenue):
| July online casino revenue | Population | Per-capita revenue | |
|---|---|---|---|
| Pennsylvania | $215.4 million | 13 million | $16.65 |
| Michigan | $195.4 million | 9.3 million | $20.65 |
| New Jersey | $191.4 million | 10 million | $19.86 |
| Connecticut | $41.7 million | 3.6 million | $12.86 |
| West Virginia | $20 million | 1.8 million | $9.94 |
| Delaware | $6 million | 1 million | $3.90 |
| Rhode Island | $2.6 million | 1.1 million | $2.09 |
| Average | $96.1 million | 5.7 million | $16.86 |
The prospect of California becoming an online casino state would redefine how we look at iGaming revenue. As of this month, Pennsylvania held the record for the most online casino revenue in a month: $233.1 million this past March.
If California became the eighth state to offer online casinos, it would more than triple the revenue that Pennsylvania brought in its record-breaking month. What’s more, California’s monthly revenue would likely more than double the total U.S. iGaming win. How?
By building a predictive model around the per-capita revenue of iGaming states with the biggest populations, PlayUSA projects California could’ve earned $724.6 million in July:
| July online casino revenue | Population | Per-capita revenue | |
|---|---|---|---|
| Pennsylvania | $215.4 million | 13 million | $16.65 |
| Michigan | $195.4 million | 9.3 million | $20.65 |
| New Jersey | $191.4 million | 10 million | $19.86 |
| Average | $200.7 million | 10.8 million | $18.58 |
| California (projected) | $724.6 million | 39 million | $18.58 |
July tends to be a slower month for online casino revenue, too. March is typically the top month for big markets like Pennsylvania. If California revenue tracks Pennsylvania trends, then it’s possible iGaming could’ve generated nearly $780 million this past March.
So far, states like New Jersey and Pennsylvania legalizing online casinos has not led to the same gaming explosion that followed early adopters legalizing sports betting in the years after 2018.
However, none of those states had the revenue-earning potential that California has. If the Golden State consistently posted $700-plus million in revenue each month, legislators in gaming jurisdictions across the country might change their tune about online casinos.
While online casinos generate considerable revenue for iGaming operators, they also bring millions of dollars in tax revenue to the states in which they operate. It would be a big benefit to California tribes.
The prospects of that tax revenue might very well convince lawmakers that the monetary benefits of online casinos outweigh the ethical and competitive concerns that often kill iGaming legislation.
