US commercial gambling revenue slumps to lowest point since 2003

According to The American Gaming Association’s (AGA) latest commercial gaming report US commercial gaming revenue slumped to $29.98bn in 2020, the market’s lowest figure since 2003.

Slots accounted for the majority of revenue with $18.87bn, however this was down by 33.8% year-on-year. Table game revenue was also down to $5.09bn in 2020, a year-on-year drop of 39.4%.

While traditional land-based gambling revenue slumped in 2020 sports betting and igaming saw promising growth. 

According to the report, sports betting revenue was up 68.9% to $1.53bn, while igaming products such as online casino generated $1.55bn representing a 198.8% year-on-year increase.

The growth in sports betting revenue can be attributed to the rapid expansion of gambling in US states. At the time of writing at least 19 US states have legal and regulated sports wagering markets operational.

Covid drives revenue drop

In its announcement, the AGA described last year’s revenue drop as “unprecedented.” 

The AGA said: “The devastating impact of the Covid-19 pandemic on the gaming industry, with GGR contracting by nearly one-third (31.3%) year-over-year, overshadows previous slumps. During the Great Recession, gaming revenue decreased by a comparatively mild 8.4 percent during the span of two years.”

In March 2020, casinos across the country were ordered to temporarily close their doors to the public. By the end of March, 95% of all commercial casinos in the US closed their doors due to health concerns over the threat posed by the coronavirus pandemic.

In its announcement, the AGA said that commercial casinos lost 27% of normal operating days throughout 2020 because of mandated COVID-19 closures. Commercial casinos were open (with capacity restrictions) for an estimated 124,882 days in 2020 instead of 170,484 days had the industry not been shuttered.

AGA President and CEO Bill Miller said: “COVID-19 devastated our business and the employees and communities across the country that rely on casino gaming’s success. 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.”

At this moment in time 911 of the country’s 998 casino venues have managed to reopen and resume operations.

How did different states perform?

Nevada was the leading state with $7.87bn in gambling revenue. However, this was down 34.6% year-on-year and the state’s worst performance since 1996.

New Jersey took second place with $2.88bn in revenue, which was also down by 16.9%. Pennsylvania took third place after commercial casinos generated $2.70bn in revenue which was down 20.3%.

With the exception of Oregon and New Hampshire, every US state with a commercial gambling industry saw revenue drop in 2020. Oregon and New Hampshire do not have any land-based commercial casinos, but do offer online sports betting.

When it comes to sports betting and individual states, New Jersey led the industry after generating $398.5m in revenue, representing a 33.1% increase. Pennsylvania took second place with $269.9m in revenue while Indiana generated $136.4m in sports betting revenue.

Just the Q4 figures

When looking at the fourth quarter figures gross gaming revenue amounted to $9.19bn, which was down 16.5% from the previous year.

Slots accounted for $5.65bn of the total Q4 revenue which was down 20.3% while table games generated $1.45bn which was down 29.9%. 

Sports betting revenue for the fourth quarter grew to $860.4m while online gambling revenue generated $484.5m representing a 185.4% increase.