AGA Casino Report Points To Better Days After COVID

The COVID-19 pandemic took a toll on the casino industry. According to the latest research report from the American Gaming Association (AGA), the commercial casino industry experienced a 31 percent drop in revenue. However, there was the slightest of silver linings, as sports betting and online gambling blossomed during the pandemic.

As the AGA report notes:

“While the pandemic overwhelmed traditional gaming sectors, the industry experienced monumental growth in emerging verticals like sports betting and iGaming. All of last year’s shifts in the commercial gaming landscape at both the state and national levels are covered in detail in American Gaming Association’s (AGA) State of the States 2021: The AGA Survey of the Commercial Casino Industry.”

Key findings from the report include:

• $30.0 billion generated in commercial gaming revenue in 2020 – the first market contraction since 2014 and the lowest total since 2003 (see picture below from the AGA report)
• 45,600 lost business days for commercial casinos due to pandemic-related closures, or approximately 27% of potential operating days.
• $6.7 billion paid in gaming taxes to state and local governments, with billions more supported in sales, income and other taxes

“The gaming industry faced enormous challenges in 2020 – and we also saw significant changes, as player demographics shifted and emerging verticals saw strong growth,” said AGA President and CEO Bill Miller. “From sharp revenue declines, to booming legal sports betting activity and overwhelming voter enthusiasm behind gaming, this year’s report reflects both the highs and lows of the past year.”

Lost Revenue Closely Tied to Length of Shutdowns

Unsurprisingly, casino markets that experienced longer mandated closures were the hardest hit. According to the AGA, casinos lost a collective 45,600 days in 2020, which equates to 27% of the year.  

As the report states, “New Mexico experienced the steepest decline, as casinos closed in mid-March and remained shuttered the rest of the year, while South Dakota reopened after just a seven-week shutdown and saw a relatively modest revenue decline.”

As the above picture from the report shows, there were a few outliers, most notably, New Jersey and Pennsylvania, which are not surprisingly, the top two online gambling markets in the country. The third state that overperformed was Massachusetts. Its performance is much harder to explain but likely had to do with pent-up demand and Massachusetts’ ability to pull visitors from surrounding states.

2020 Started Strong… 2021 Looks Even Better

2020 got off to a good start and looking like the recent growth trend would continue, as casino revenue was up 11.4 percent in January and February compared to 2019. And then COVID-19 happened.

In a survey conducted in April 2020, AGA member company executives, including commercial and tribal operator and supplier CEOs and CFOs, estimated a revenue decline of slightly more than 40 percent in 2020 and a timetable for recovery of up to two years. Q1 2021’s commercial gaming revenue numbers tied for the highest-grossing quarterly total ever, suggesting a quicker recovery than anticipated.

significantly for the remaining 10 months of the year, beginning in March when all U.S. casinos shuttered due to the COVID-19 pandemic. 

“The first quarter of 2021 clearly shows that consumer interest in gaming never waned, despite the challenges of 2020,” said Miller. “This momentum is a direct result of our industry’s ability to provide safe environments for our employees and guests to return to and is a strong indicator that our recovery is on the horizon.”

About the Report

AGA’s annual State of the States report details the commercial gaming industry’s financial performance, including analyses of each of the 29 states and the District of Columbia that had commercial gaming operations in 2020. The report, developed with VIXIO GamblingCompliance, also provides a breakdown of the legality of types of gaming and number of casinos by state, summarizes major gaming policy discussions and previews opportunities and challenges for the industry. The companion State of Play map provides the report findings in an easy-to-use, interactive tool.

Background

State of the States is a reference guide focusing on the commercial casino sector. Tribal casinos are subject to different reporting requirements and timelines and revenue figures for 2020 were not available at the time of this report’s publication.

COVID-related restrictions on casino capacity and amenities vary on a state and local level. AGA’s COVID-19 casino tracker is tracking casino capacity restrictions on a state-by-state basis.