Sports betting shines despite US casinos losing over 45k business days to pandemic closures in 2020

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Commercial gaming revenue down 31% YOY, but sports betting was a bright light, AGA says.

The gaming industry in the United States felt a significant impact from the Covid-19 pandemic, with only the rapid spread of sports wagering staving off a rout.

That was the conclusion of the American Gaming Association’s annual State of the States report, which said commercial gaming revenue plunged 31% in 2020 from 2019.

The study’s authors said the pandemic overwhelmed traditional gaming sectors, but they added the industry experienced monumental growth in emerging verticals such as sports betting and online gaming.

Total annual revenue for the gaming industry was $29.98 billion, the lowest mark since 2003. All 25 states that have physical casinos reported lower revenue year over year.

2020 started off well, as during the first two months of the year US commercial gaming revenue was up 11.4% compared to the same period in 2019. However, due to mandated casino closures and capacity restrictions, revenue fell significantly for the remaining 10 months of the year, beginning in March when all US casinos were shuttered. 

 Collectively, America’s commercial casinos lost more than 45,600 business days to pandemic-related closures last year, meaning they were closed for approximately 27% of the year on average.

On the plus side, by the end of last year, 19 states plus the District of Columbia had active legal sports betting markets. Despite land-based casino closures and the suspension of major sporting events in the spring, the AGA said sports betting saw significant growth, with Americans legally wagering more than $21.5 billion in 2020, compared to $13 billion in 2019.

Revenue from legal sports betting operations increased 69% to $1.5 billion.

The pandemic helped shake up the top 20 casino markets as well, the study said. The biggest gainer was the Baltimore-Washington, DC, gaming market, which expanded to become the third-largest in the country, passing Chicagoland and trailing only the Las Vegas Strip and Atlantic City.

The Gulf Coast, St. Louis and Shreveport/Bossier City markets all jumped several spots in the top 20 rankings, the AGA reported.

“The gaming industry faced enormous challenges in 2020, and we also saw significant changes, as player demographics shifted and emerging verticals saw strong growth,” AGA president and CEO Bill Miller (pictured) said in a statement. “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.”

 

Rapid turnaround coming?

In a survey conducted in April 2020, AGA member company executives, including commercial and tribal operator and supplier CEOs and CFOs, estimated they would see a revenue decline of slightly more than 40% in 2020 and a timetable for recovery of up to two years.

However, Q1 2021’s commercial gaming revenue numbers tied for the highest-grossing quarterly total ever, which Miller said could suggest a quicker recovery than anticipated.

 “The first quarter of 2021 clearly shows that consumer interest in gaming never waned, despite the challenges of 2020,” Miller assessed. “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.”

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