New AGA Report Reveals Highs and Lows of 2020 US Commercial Gambling Landscape

  • Commercial casino revenue fell 31% in 2020 to $29.98bn, its lowest total since 2003
  • Sports betting handle was $21.5bn, with sportsbook revenue rising 69% to $1.5bn
  • The average commercial casino had to close for 27% of 2020 due to pandemic shutdowns
  • Commercial gaming appears to be recovering as Q1 revenue equaled the all-time quarterly record
Bellagio gaming table with plexiglass barriers
A new report from the AGA showcases the high and lows for the US commercial gaming industry during a tumultuous 2020. [Image:]

All about the pandemic

The COVID-19 pandemic had a major impact on the US gambling industry and a new report from the American Gaming Association (AGA) looks at the changes in the commercial gambling sector last year. A number of highlights stand out from “State of the States 2021: The AGA Survey of the Commercial Casino Industry,” released Thursday.

commercial gaming revenue fell to its lowest level since 2003

As a result of the extensive shutdowns and restrictions on commercial casinos during most of 2020, commercial gaming revenue fell to its lowest level since 2003. Customer spending was just $29.98bn, a 31% year-on-year drop. State and local governments received $6.7bn in gaming taxes.

The continued growth in sports betting was a positive for the sector in 2020 as the activity became legal in more states. Total US sports betting handle in 2020 was $21.5bn, up from $13bn. The resulting revenue for sportsbooks was $1.5bn, a 69% increase from 2019. By the end of 2020, 19 states and Washington, D.C. had sportsbooks up and running. A number of states also legalized the activity in 2020 and have subsequently launched this year or are close to doing so.

Four states (not including online poker in Nevada) had iGaming platforms in operation last year. This sector generated almost $1.6bn in revenue, which was about triple the previous year’s total.

Tough year after a bright beginning

Commercial casinos had started off 2020 in a strong fashion. Gaming revenue for commercial operations was up 11.4% for the first two months of the year. The pandemic, however, put a stop to any further growth beginning in March. Commercial casinos as a whole across the country were closed for over 45,600 combined business days, meaning that the average casino was closed for 27% of the year.

Every one of the 25 states with land-based commercial casinos had lower revenue in 2020 than the previous year. Interestingly, the gaming market in Baltimore-Washington, D.C. is now the third biggest in the US, behind only Atlantic City and the Las Vegas Strip, moving ahead of Chicagoland.

The decline in gaming revenues was closely linked to the number of lost operating days. The state with the biggest drop in commercial gaming revenue last year was North Dakota, followed by New York and Michigan. South Dakota, Arkansas, and New Jersey were the least affected.

Light at the end of the tunnel

A survey of casino company CEOs and CFOs fom April 2020 gave a general consensus that it would likely take the gaming industry up to two years to recover from the pandemic. 2021 first quarter figures, however, indicate that there could be a much quicker recovery.

Commercial gaming revenue for Q1 2021 tied for the highest-grossing quarter of all-time at $11.13bn. Restrictions on casinos across the country have been easing in recent months as the rollout of vaccines continues. Some states are even back to 100% casino capacity.

AGA CEO and president Bill Miller spoke about the significant changes that the gaming industry went through last year. Referring to the new AGA report, Miller said: “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.”

Miller also noted the detrimental impact that the pandemic had on other businesses with close links to commercial gaming, including hotels, conferences, restaurants, and live entertainment.

Tribal casinos do not have to follow the same reporting requirements as commercial casinos. The 2020 revenue figures from the tribal sector were not available at the time of the publication of the AGA’s report. While not subject to state shutdown orders, many tribal casinos also closed for extended periods last year.

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