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USA Commercial Gaming Revenue to Hit $50 Billion Plus
By Jeff Osienya Dec 10, 2021 IndustryThe American Gaming Association has released a new report indicating that the commercial gaming sector is poised for a record-breaking year, well beyond $50 billion. Improved visitation numbers and pent-up demand continue to drive industry growth.On Tuesday, the American Gaming Association (AGA), USA’s premier trade body for the gaming industry, released a numbers report for the progress of the commercial gaming revenue. So far, the commercial gaming revenue in 2021 for all the 987 commercial casinos in the USA has hit $43.68 billion, beating the best ever annual revenue record of $43.65 billion set in 2019.
Mind you, only three states have reported their November by the time the AGA published the figures. Nevada is one of the states that haven’t released its November revenue reports, but it is historically a highflyer in gaming performance. The Silver State traditionally releases its monthly revenue figures at the end of the following month, meaning that November’s performance will be revealed late this month. Come October, Nevada matched a previous milestone of seeing over $1 billion in monthly revenue for eight months back-to-back.
In a report published by the Las Vegas Review-Journal, Casey Clark, the AGA Senior Vice President, said:
Quote“When full-year numbers are in, we expect commercial gaming revenue to come in around $50 billion — a remarkable turnaround for our industry that was devastated by COVID-19. Our historic recovery is a testament to gaming’s world-class hospitality and entertainment experiences.”
Getting to the $50 billion mark is a sure thing as long as the monthly gaming revenue performance continues with its current trend. As we speak, the entire sector has been collecting monthly revenue worth over $4 billion for eight straight months – from March to October 2021. This winning streak becomes a lot more impressive if you consider that before 2021, the monthly revenue for the entire gaming industry had never crossed the $4 billion mark.
States Continue to Outpace Their Previous Revenue Records
Looking at a quarter-by-quarter analysis, the nation’s commercial gaming revenue blew past historic quarterly records in September after hitting a high of $13.89 billion in the third quarter. This winning performance was thanks to winning slot machine revenue for October, coming in at $27 billion, coupled with $7.22 billion from table games. In October, sports betting also came through with landmark revenue worth $3.16 billion, a 359% jump year over year.
Moving on to a state-by-state breakdown, in July, August, and September, ten out of all the 25 gambling legal states with commercial casino gaming smashed their previous quarterly gaming revenue records. Of these ten states, four of them, Pennsylvania, New York, New Jersey, and Nevada, were the best performing commercial gaming states over the 2019 calendar year.
Furthermore, the famed Las Vegas Strip also crushed its quarterly revenue records in the third quarter of this year after generating $2.06 billion. The shining performance was majorly driven by the strong comeback of tourist visitation for the Q3 2021 period. There were a total of 9.2 million visitors for the three-month period between July and September, which is a 10% visitation uptick compared to the second quarter of 2021. This visitation volume for the Vegas Strip is the highest ever recorded since the onset of the COVID-19 pandemic in March 2020.
Following the announcement of Q3 numbers in November, Bill Miller, the AGA President, and CEO Bill Miller said:
Quote“Two straight quarters of record gaming revenue is an incredible accomplishment in any context, let alone after the most challenging year in industry history. Our recovery is not a flash in the pan but rather a sustained result of our leadership in responsible reopening, world-class entertainment offerings, and widespread favorability. With brick-and-mortar gaming setting records, the expansion into new verticals, and domestic and international tourism recovering, the industry is in a strong position for a full recovery. I’m confident that the return of meetings, conventions, and international travel will further accelerate gaming’s recovery in 2022.”
Still on the state performances, From January to October, 11 out of all the 25 commercial gaming US states whose markets have been active two years ago have already bested the revenue they saw for the entire 2019. Besides, another eight US states are doing better for the first 11 months of 2021, compared to the same period in 2019. Further, six states, South Dakota, Pennsylvania, Michigan, Massachusetts, Iowa, and Colorado, have already recorded their highest ever annual revenue with two months left for the 2021 calendar year.
Pent-Up Demand is Also Expediting the Recovery of the Commercial Gaming Sector
Another significant factor that’s contributed to the bouncing back of the USA’s commercial gaming sector is pent-up demand as pandemic-related restrictions continue to be relaxed across the states. As such, gaming companies are already making haste to ready their companies for booming business as the gaming sector continues to spring back to normalcy.
In a November survey conducted to a panel of 24 casino company CEOs from the AGA, 12 of them disclosed that they planned to pump more resources into hotel amenities, including food and beverages. Meanwhile, 43% of two-dozen chief executives indicated that they would upgrade their slot machine games sitting on their floors to meet increased demand. Additionally, 75% of executives for gaming equipment said that they expected to see increased sales of gaming units for their brick-and-mortar facilities next year.
In an interview with the Las Vegas Review-Journal, Brendan Bussmann, the Director of government affairs for Las Vegas-based Global Market Advisors, pointed out some of the factors that have boosted the gaming sector's growth in 2021 saying:
Quote“There are a number of factors that have contributed to this effort, including pent-up demand from the government-mandated shutdowns but also some of the additional money that has been recirculated into the economy from either stimulus or savings during the Great Shutdown. The challenge ahead is to maintain those numbers in some cautionary headwinds of inflation, fuel costs, and tightening on discretionary income.”
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