American Gaming Association Reports Bleak Q2 COVID Impact
The hits keep coming for the legal betting industry in the US. On Thursday, the American Gaming Association published a report showing just how much COVID-19 has impacted the industry as a whole during Q2 of the fiscal year, and the numbers are staggering.
On the bright side, those involved in the legal betting industry in the US have pointed to a growing sense of optimism that the industry can return to pre-COVID form. This despite distancing regulations at brick-and-mortar facilities and the underlying potential that major North American sports could be paused anytime due to pandemic concerns.
"COVID-19 has undoubtedly posed the most difficult economic challenge the gaming industry has ever faced," said AGA President and CEO Bill Miller. "Yet, gaming's record popularity prior to COVID-19, as well our resilience in the midst of such adversity, is evidence of the industry's foundation for continued success as we emerge from the pandemic."
Eye-popping numbers
Commercial gaming revenues in the US declined an eye-popping 78.8% in the second quarter of 2020 year-over-year to $2.30 billion according to the new AGA Commercial Gaming Revenue Tracker. A closer look reveals that no sector of the industry was untouched by the coronavirus crisis, from the brick-and-mortar facility to the online sportsbooks that were seriously short on action.
US commercial gross gaming revenue (GGR) for the first half of 2020 fell 45.6% year-on-year to $11.70 billion. The GGR losses incurred in April and May for the US markets exceeded 90% by comparison. That means that the 45.6% number was buoyed by a strong start to 2020 and the overall figures could have been much worse absent a record January and February in the legal betting space.
Now for some good news
According to the AGA report, America's 989 commercial casinos were in the process of an uptick before COVID-19 hit. January and February of this year saw combined commercial gaming revenue actually increase year-over-year by 10.4%. That was before casinos were forced to close in March.
Gross gaming revenue reportedly increases in some jurisdictions once lockdowns were lifted. Despite distancing policies and limited gaming availability, Gross Gaming Revenue actually grew year-over-year in South Dakota by 42.5%, in Ohio by 19.3% and Indiana by 7.4%.
Casino openings in June were also met with impressive revenue upticks, which speaks to the pent-up demand and optimism that casino gaming can return to its pre-COVID heights. Despite just a third of US casinos opening their doors in June (under huge restrictions), revenues for those properties exceeded the previous two months combined - by four times. At this point in time, roughly 90% of casinos are open and ready to contribute to the revenue haul.
How each sector performed
The AGA took a peek into which sectors of the gaming industry were able to perform and others that fell flat during the coronavirus shutdowns. To nobody surprise, sports betting was a major loser over the spring months largely because of the hibernation of major sports around the globe. There just wasn't a huge appetite for table tennis and Belarussian pro basketball. Through it all however, the record start of the year for sports betting allowed the sector to record a 4.1% increase in Q2.
Land-based slots revenue sunk 81.9% year-over year, contributing $2.30 billion for Q2 of 2020 and table games revenue slid 86% to $286.9 million. When taking into account the three months prior, slots decreased 78% to $7.36 billion in revenues and table games contributed $2.13 billion, a 78.5% slide.
The iGaming industry came out the big winner the last few months with sports on hiatus and casinos effectively closed. Year-over-year growth in iGaming actually eclipsed that of traditional sports betting, percentage-wise, despite only being legal in six states. Revenue for iGaming in Q2 was up more than 250% to $402.7m, almost double the previously quarterly record, set in Q1. It is unclear if his vertical will continue to rise, but it has officially arrived on the radar of the US legal betting industry the last 12 months.
Overall…
“The gaming industry has been a leader in implementing rigorous, innovative protocols that have allowed the vast majority of our properties to reopen and stay open,” said AGA President and CEO Bill Miller. “With business returning to casino floors and sportsbooks seeing increased action, the gaming industry is steadily charting a responsible path to recovery that prioritizes health and safety, supports the communities where we operate, and offers first-class entertainment.”
COVID-19 still has its claws dug into American society – there is no way to predict just how this thing ends or how it effects the US gaming industry going forward. But the American Gaming Association has proven the resiliency of the legal sports betting industry in the US. The industry will need every bit of that resiliency during this insane 2020.
