COVID Hits US Commercial Gaming Industry Hard in 2020
The American Gaming Association has provided new data on 2020’s gaming industry, revealing that the commercial industry in the US saw its worst year since 2003.
After the COVID-19 closures and restrictions issued to casinos across the United States, the commercial industry took a significant hit. The pandemic hit the industry so hard, it was the worst year for the nation since 2003. Commercially licensed operators brought in $30 billion in revenues. This is a $13.6 billion drop from 2019, a decline of over 31%.
Details of 2020
The American Gaming Association (AGA) announced that technically, $29.98 billion was earned, before rounding up. This was the lowest amount since the $28.7 billion generated in 2003 by commercial operators. Way back then, only 11 states offered legal gaming. Today, there are 29 states that offer commercial gaming in some form or fashion, including the District of Colombia.
CEO and AGA President Bill Miller commented on the findings by stating: “These numbers show the economic realities of COVID-19 and underscore the importance of targeted federal relief and ramped-up vaccine distribution to accelerate gaming’s recovery in 2021.”
Unfortunately for the gaming industry as a whole, 2020 was a year when the revenues declined for the first time since 2014.
The bulk of the issue stems from the shutdown time frame early on in the pandemic. In March, the US saw the pandemic hit hard and many businesses shut down across the nation, including casinos. Most of the properties were back in operation by May or June, but those weeks in which no activity took place meant the loss of millions in revenues.
In 25 states that offer commercial casinos, over 45,000 days were lost. This is a huge cut in operations and with zero money coming in, it severely cut down on the earning potential for operators. Also affected were state budgets. Most areas in the US that offer commercial gaming, the operators are providing a percentage to the cities they operate in as well as the state.
With no money coming in, there was zero funds that could be paid in taxes or other contributions. Some areas like Las Vegas have found they rely far too much on land-based gaming. Discussions have been underway as to what can be done to bring in new sources of revenue.
Breaking down operation days by state, it was New Mexico that lost the most. The state saw almost 80% of its commercial operation days gone in 2020. Next to New Mexico, New York was the hardest hit, losing over 48% of operation days.
Increase in Online Gaming Revenues
While the land-based industry was hit hard due to closures and lower capacity levels, the online gambling industry thrived. Players who would normally play in live format, were going online to play slots, table games, poker, and place sports bets.
In the states where the iGaming industry is offered in some form, it led to a buffer in earnings. Despite the land-based loss, states such as New Jersey and Pennsylvania were able to bring in some sort of revenues.
Online casinos and poker games brought in almost $1.6 billion in gross gaming revenues. This was a huge revenue increase from the previous year by close to 200%. Sports betting generated over $1.5 billion which was an almost 70% jump from 2019.
The sports betting industry is one to watch, as it is larger than the online casino and poker sector. There are 18 states plus the District of Colombia that offer sports betting licensing in a regulated market. Additional states are considering legislation as well, which would lead to an even larger industry moving forward.
Operators are hoping that 2021 will be a better year and some type of recovery can be seen despite the continuing threat of COVID-19.