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AGA State of the States: Ups & Downs of 2020’s Gaming Sector
By Jeff Osienya May 24, 2021 IndustryThe American Gaming Association has released a State of the States report to give an outlook of last year’s gaming performance following the impact of the pandemic. Join us as we dig deeper into the numbers.USA’s gaming industry trade body, the American Gaming Association (AGA), has published a new report dubbed State of the State to offer insight on last year’s performance. Overall, there was a 31% drop in commercial gaming revenue, a decline that was mainly attributed to the novel coronavirus pandemic, which caused an industrywide disruption. As a result, the gaming sector collected a total of $29.98 billion for the 2020 calendar year, marking the lowest annual haul for the industry since 2003.
COVID-19 closures imposed for the better part of 2020 led to a nationwide loss of an average of 27% of working days across all 25 gambling legal states. Looking at a state-by-state comparison of the lost business days, New Mexico suffered most, after the pandemic, nearly 80% of its land-based casino operational days – almost three times the national average. That many days of forced COVID-19 casino closures translated to a year-over-year GGR slide of about 80% as well. Similarly, New Mexico’s revenue decline is roughly thrice the industry average.
On the other hand, South Dakota was least impacted by forced Coronavirus closures. Overall, The Mount Rushmore State lost less than 17% of its casino working days, about half of the gaming sector’s average. As for the state’s Gross Gaming Revenue (GGR) for commercial casinos, there was only a 4.5% slip compared to 2019!
Bill Miller, the Chairperson, and CEO of the trade association shared comments about the report giving the numbers a positive spin by saying in part:
Quote“While gaming revenue fell, it’s remarkable it only dropped as much as it did. That’s a testament to our ability to reopen quickly and safely, while still providing a first-class entertainment experience that customers were eager to return to. It’s also a byproduct of Americans’ growing acceptance of gaming, as five new sports betting markets and one new igaming market opened in 2020.”
Shakeup in Gaming Markets Performance Countrywide
Last year’s pandemic-related challenges also led to a considerable stir in the overall revenue collected by the top 20 casino markets. For example, the Baltimore-Washington, DC gaming market ended up besting Chicagoland’s performance to jump to the top 3 best-performing markets in the country. Others, including the Gulf Coast, St. Louis, and Bossier City/Shreveport gaming markets, leaped several spots ahead in the 2020 rankings compared to last year.
On the flip side, the biggest losers for last year were New York City, Detroit, Poconos, and Black Hawk/Central City, and Downtown Las Vegas. Each of these markets slid by at least 3 positions last year, compared to 2019’s rankings. At the top of the list, The Las Vegas Strip market retained its strong lead with a $3.65 billion GGR, beating the second-best performer, Atlantic City, by about 2.17 billion.
For clarification purposes, the $29.98 billion win only covers electronic gaming devices and table games. From the $29 billion-plus GGR, a total of $6.7 billion was paid as tax to states and local governments, and billions more were paid in other forms of duties, including sales and income taxes.
However, unlike the land-based casino gaming vertical, sports betting and internet gaming recorded impressive growth despite the pandemic woes. The overall industrywide sports betting revenue hit a high of $1.6 billion after a whopping 69% surge thanks to the continued maturity of existing legal sports betting markets. Moreover, this performance is also due to the launch of seven new legal sports betting markets across the county.
As for iGaming, the gross countrywide win in 2020 (excluding online poker in Nevada) also smashed records after bringing in $1.6 billion, which is 199% more than 2019’s haul. In his analysis of the State of the States report, CEO Bill Miller further added that:
Quote“The gaming industry faced enormous challenges in 2020 – and we also saw significant changes, as player demographics shifted and emerging verticals saw strong growth. 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.”
The Gaming Industry is Already Bouncing Back Tremendously in 2021
As the US gaming sector moves away from last year’s chaos to usher in post-pandemic normalcy, things are already looking up for the industry. The Q1 2021 revenue has brought a lot of hope for the gaming sector’s recovery after matching the best quarter in history with a remarkable $11.13 billion win.
The rapid recovery of the gaming sector is getting a boost from the speedy countrywide roll-out of vaccination programs. For starters, casinos in states like Nevada have already gone back to 100% capacity operations. In addition, many more gaming establishments in the region have started dropping mask-wearing requirements in their venues.
With how things are going, industry observers are optimistic about the gaming sector’s performance by the end of this year. In his briefing after the latest AGA report, Bill Miller also shared his sentiments about the future of US gaming beyond the pandemic as follows:
Quote“Our industry met the challenge of the last year head-on. Now, gaming is regaining momentum, with Q1 2021 commercial gaming revenue matching pre-pandemic highs. I hope this report is a valuable resource on the commercial gaming landscape as we make significant headway on our recovery. I’m already optimistic that next year’s report will present a powerful story of gaming’s resurgence.”
It’s worth noting that the data discussed in AGA’s State of the States report doesn’t account for tribal gaming as the USA’s tribal gaming industry follows a different set of timelines and requirements. The most recent data furnished by the National Indian Gaming Commission was of 2019, when the tribal gaming revenue was $34.6 billion.
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