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With the release of the Commercial Gaming Revenue Tracker of the American Gaming Association (AGA), the full effect of the COVID pandemic on US commercial gaming revenue in 2020 was reported this week.
First market contraction since 2014
In total, commercial gaming generated $30 billion in 2020, down more than 31 percent year-on-year, marking the US gaming industry’s first market contraction since 2014 and the lowest total gaming revenue since 2003.
The year ended with some strong momentum in Q4 on a happier note, with a 1.7 percent rise in sales over Q3 2020. The nearly $9.2bn in sales nevertheless reflected a decline of 17 percent year-over-year.
New gaming options boosts market
The success of gaming in 2020 was boosted to some degree by the growth of new gaming options, with legal sports betting earning an all-time high of $1.5 billion in revenue, up 69 percent year-on-year, and almost tripling igaming revenue to nearly $1.6 billion.
But the situation was not sugar-coated by AGA President and CEO Bill Miller, who said: “COVID-19 devastated our business and the employees and communities across the country that rely on casino gaming’s success.
Responsible reopening efforts
“We have persevered by leading responsible reopening efforts, supporting our employees, and extending a hand to our communities. Still, 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.”
Owing to mandatory COVID-19 closures and, to a lesser degree, interruptions caused by hurricanes along the Gulf Coast, commercial casinos lost 27 percent of daily operating days in 2020. Commercial casinos were open for an estimated 124,882 days in 2020 (with capacity restrictions) instead of 170,484 days had the sector not been shut down.
Extending beyond gaming
The influence on the casino industry of COVID-19 extends beyond gaming revenue. Live entertainment, tourism, and meetings and conferences in tourist attractions such as the Las Vegas Strip, which make up more than half of casino resort revenue, all came to a standstill in 2020 and are only now beginning to reopen.
Miller added: “Hospitality and travel have been among the sectors hardest hit by the pandemic. I am encouraged by recent bipartisan momentum on Capitol Hill to support these industries, which are crucial to our nation’s full economic recovery.”
The industry has steadily demonstrated its capacity to safely return to business after the reopening of casino properties in mid-2020, with 911 out of 998 US casinos open today. AGA analysis reveals that in 2021, near the highest pace since the AGA started monitoring last March, one in three American adults expect to visit a casino. Approximately 80 percent of potential casino tourists believe that the industry has done a decent job of reopening safely.
Disproportionate toll of COVID-19
Miller noted in a separate statement: “This data provides yet another reminder of the disproportionate toll COVID-19 has taken on our industry, without even accounting for the lost revenue in live entertainment, hotel bookings, and meetings and conventions.
“As the AGA advocates for additional federal relief, we will continue to tell this story to policymakers while also highlighting the vital role gaming’s recovery plays in communities across the country. Despite these numbers, I remain optimistic for the year ahead. We have demonstrated leadership on responsible reopening, with 911 of 997 US casinos currently open.”
He concluded: “Before the pandemic, the commercial gaming market had experienced five straight years of growth and January and February 2020 were following a similar trend. With the expansion of sports betting – a bright spot over the last year – as well as the accelerating rollout of vaccines, I’m confident that 2021 will see a great recovery for our industry, employees, and communities across the country.”