The American Gaming Association (AGA) released its report on US commercial gaming revenue for 2020 last week and predictably, the numbers aren’t great, thanks to COVID-19 and its year-long grip on society as a whole. While the US legal sports betting industry grew exponentially in 2020, producing a total $21.49 billion handle among participating jurisdictions, commercial gaming revenues took a serious hit.
The American Gaming Association‘s Commercial Gaming Revenue Tracker is the industry temperature gauge. The tracker revealed a rare market contraction for the U.S. gaming industry – its first since 2014 and its lowest gaming revenue total in 17 years, during the market-slump of 2003.
The American Gaming Association‘s Commercial Gaming Revenue Tracker reported out on 30 commercial gaming markets that were operational in 2020. It took state-by-state figures and “cumulative insight into the U.S. commercial gaming industry’s financial performance based on state revenue reports.”
The Tracker took into account commercially licensed gaming, which encompasses all regulated and legislated state casinos, retail and online betting as well as igaming platforms in participating states.
The Tangible Loss
2020’s Commercial Gaming Revenue was expected to take a hit, but the scope wasn’t really known until the AGA report released last week. It showed that the gaming industry, despite growth in the jurisdictions it went live in, had revenues of $29.98 billion, which represents a year-over-year drop of about 31%.
As previously mentioned, 2020 was the worst year for the US gaming industry since 2014 and the lowest revenue total since 2003, when $28.7 billion was made by US casinos. That was during a time that there were just 11 states with their own legal gambling platforms. By comparison, 2020 had 29 states with some form of commercial gaming available.
The Reasons… or REASON
COVID-19 decimated “normal” in 2020 in every aspect of life. But it was travel, tourism and hospitality that took arguably the biggest hit to its bottom line.
“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,” said AGA President and CEO Bill Miller.
Mandated COVID-closures of casinos saw brick-and-mortar casinos lose out on an estimated 27% of their normal operating days, from 170,484 days to 124,882 days, and the days that casinos were open, most had capacities capped at 25%. Travel to casino-destinations such as Las Vegas and Atlantic City were all-but stopped throughout most of 2020, affecting the bottom line of the industry as a whole.
Global sports shutdowns, the cancellation of March Madness and limited capacity at sporting venues also proved costly for the US commercial gaming industry.
The US commercial gaming industry can take a bit of solace in the fact that things aren’t likely to get any worse… ever. 2020 represented the perfect once-in-a-century storm for which the industry really had no chance to gain a solid footing.
“COVID-19 devastated our business and the employees and communities across the country that rely on casino gaming’s success,” said Bill Miller. “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.”
Q4 of 2020 showed year-over-year losses but they were about half of what was seen during Q3, meaning that there were tangible signs of hope toward the end of 2020. There was a 1.7% increase in revenue in Q4, although year-over-year, Q4’s revenue was still 17% below the fourth quarter of 2019.
Sports betting and iGaming were bright sports during both quarters – they carried the industry in 2020. Revenue from sports betting alone was $1.5 billion, up 69% year-over-year while iGaming’s revenues climbed nearly 300% during 2020.
So, as our world slowly starts to creep back to “normal”, so will the commercial gaming industry. 2020 was as bad as it gets – those that survived are deserving of a robust recovery, one that we are starting to see already.