Despite gaming’s “devastating” 2020, the industry appears poised for a record-setting 2021, an American Gaming Association executive said Thursday.
Last year’s expansion of legal sports betting, the growth of igaming, and the increasing acceptance of casinos as vital parts of the economy, plus the industry’s strong showing in the first quarter of this year, point to an impressive rebound for the industry, said Casey Clark, AGA’s senior vice president of strategic communications. “2019 was a record year, and I think 2021 could best that,” he said.
AGA’s annual “State of the States” report, released Thursday, showed that consumer spending on commercial gaming fell by almost a third from 2019. Revenue totaled $29.98 billion, down 31.3 percent from the 2019 total of $43.6 billion. It was the lowest amount since 2003 and snapped a string of five consecutive years of revenue growth.
Casey Clark, AGA’s senior vice president of strategic communications
For comparison, nationwide gaming revenue dropped about 5 percent from 2008 to 2009, during the Great Recession.
The revenue figures in “State of the States” reflect only commercial casinos. Results for tribal casinos are not available yet, but the AGA cited estimates that they will drop at least 25 percent from 2019’s record total of $34.6 billion.
Thirty states have some form of legal commercial gaming, including sports betting; 25 of those have physical commercial casinos.
Clark noted that shutdowns from the pandemic reduced operating days for commercial casinos by about 27 percent nationwide.
“With one hand tied behind our back, we did about as well as could be expected, but certainly there were some bright spots,” Clark said.
The report cited:
Expansion of legal sports betting: Revenue rose by 68.3 percent to $1.55 billion. Legal bets totaled $21.51 billion, compared with $13.07 billion in 2019. At the end of the year, sports betting was legal in 19 states and the District of Columbia. Last summer, the country’s first legal sportsbook in a sports venue opened in Washington, D.C.’s Capital One Arena.
Growth in igaming: Revenue from online gaming, allowed in Delaware, New Jersey, Pennsylvania, and West Virginia, nearly tripled, to more than $1.55 billion. (Michigan’s igaming didn’t start until this year.)
Referendums on gaming: Nebraska voters approved casino gaming at racetracks and four Virginia municipalities backed the development of a casino in their borders. Colorado lifted its wagering limits and allowed casinos to offer more games. Maryland and South Dakota voters approved sports betting statewide, as did 55 of 64 Louisiana parishes.
As a sign that gaming is gaining stature throughout the country, a federal COVID-relief package allowed casinos to receive millions of dollars in aid.
“It was a historic moment for us,” Clark said. “In every other relief package, we not only were not included, we were specifically excluded. What we’ve seen is a significant mainstreaming of gaming as a really solid contributor to American communities. That’s where you start see a parity for us, not just within the hospitality industry, but all businesses,” Clark said.
The list of the country’s top gaming destinations illustrates the popularity of casinos outside the top two states of Nevada and New Jersey. Baltimore-Washington, D.C., is No. 3 on the list, behind the Las Vegas Strip and Atlantic City. Also in the top 10 are sites in Illinois, Pennsylvania, Mississippi, Missouri, Michigan, and New York.
The report said commercial gaming generated $6.69 billion in state and local gaming taxes during the year of COVID. That was down by 34.2 percent from $10.2 billion in 2019.
Clark pointed to commercial gaming’s 2021 first-quarter results as evidence that the industry is on the way back. Revenue topped $11 billion, matching the third quarter of 2019 as the industry’s highest-grossing quarter, the AGA reported.
“We’re seeing a real return to normal in terms of how American consumers are re-engaging with the industry,” Clark said. “It’s really exciting in terms of where we are now compared to where we were a year ago. I think we’re going to continue through a really fun and expansive time all year.”
