Gaming Market in the U.S. $68 Billion in 2014

Improved economic conditions are expected to trigger a recovery in U.S. gaming revenues in late 2011, although 2007 gaming revenue levels will not return until 2012.

According to PwC’s Playing to win: The outlook for the global casino and online gaming market to 2014, total U.S. gaming revenues will increase to $68.3 billion in 2014 from $57.2 billion in 2009, a 3.6 percent compound annual increase.

The U.S. will remain the largest region in 2014, although Asia Pacific will be the fastest growing region with a projected 23.6 percent increase compounded annually to $62.9 billion in 2014 from $21.8 billion in 2009.

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The PwC (PricewaterhouseCoopers) study finds that the gaming industry in 2014 will be similar to today’s market, characterized by large and prestigious destination developments. However, dramatic differences will also be apparent, with an ongoing shift in spending towards Asia Pacific.

“The gaming industry is facing an evolution, which presents both challenges and opportunities for the industry’s established players and those considering to enter the market,” said Mary Lynn Palenik, director, gaming, entertainment, media & communications practice, PwC US.

“The explosion of entertainment choices for consumers will make it vital for the industry to produce an offering and experience that consumers want to spend money on.”

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Buoyed by growth in racetrack casinos, regional casinos will be the fastest growing category during the next five years as investment in new and improved offerings and facilities continue to re-direct visitors and revenue. 

Regional casinos are gaining market share from Atlantic City and, to a lesser degree, from tribal casinos. For the forecast period as a whole, revenues will rise to $22.2 billion in 2014 from $16.6 billion in 2009, a 6.1 percent compound annual increase.

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According to PwC, U.S. regulations of online gaming will continue to evolve, initially with the creation of the regulatory “walled gardens,” where authorities in a particular territory seek to license, regulate, and tax online gaming between providers and players within their own borders, without allowing cross-border activity.

By 2012-2013, growing momentum is expected to pool online gaming liquidity and align regulation across borders.

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For example, the potential Federal legalization of interstate online poker games in 2012-2013 will serve to legitimize the online gaming market in general, boost usage, and act as a catalyst for developments in other online gaming disciplines, believes PwC. 

As different states’ regulatory “walled gardens” for poker start to integrate and standardize, online betting on horse racing will expand beyond the states. The growth resulting from these trends will see a blend of new onshore and offshore providers enter the U.S. market.

The study findings released Tuesday say social networking sites will be a key distribution platform for online gaming services, resulting in collaborative partnerships between gaming brands and social networks.

Lotteries will also expand their reach and scale through interstate collaboration and online pooling, combined with new online offerings.

PwC firms provide industry-focused assurance, tax and advisory services to global clients.

Photo courtesy: PwC

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