Post-COVID era: Transformation of the U.S. commercial gaming landscape

While the pandemic overwhelmed traditional gaming sectors, the industry experienced monumental growth in emerging verticals like sports betting and iGaming.

Today, the American Gaming Association (AGA) has shared its ‘State of the States 2021: The AGA Survey of the Commercial Casino Industry’ document, which covers in detail all of the last year’s shifts in the commercial gaming landscape at both the state and national levels of the United States.

This very important report represents a key tool for all industry stakeholders in that country to evaluate their performance in 2020, take the necessary measures for a reorganization of their companies and focus their efforts on recovery, renewal and the search to continue offering a quality service to its clients.

The text highlights some relevant business data about the sector. For instance, last year marked the industry’s lowest total annual revenue since 2003, with consumer spending on commercial gaming falling to US$29.98 billion, down 31% from 2019. In general, all 25 states with physical commercial casino gaming reported lower revenue than in 2019. In terms of wagers, Americans legally bet US$21.5 billion on sports, compared to US$13 billion in 2019 (+65.38%). Revenue from legal sports betting operations increased 69% to US$1.5 billion. About specific markets, the Baltimore-Washington, D.C. gaming region is now the third largest in the country, surpassing Chicago and trailing only the Las Vegas Strip and Atlantic City. The Gulf Coast, St. Louis and Shreveport/Bossier City markets all jumped several spots in the top 20 rankings.

While the first two months of 2020 started great for gaming, with U.S. commercial revenue up 11.4% compared to the same period of 2019, due to mandated casino closures and capacity restrictions, consequence of the pandemic, revenue fell significantly for the remaining 10 months of the year, beginning in March, when all the U.S. casinos shuttered. Collectively, America’s commercial casinos lost more than 45,600 business days due to pandemic-related closures last year, meaning they were closed for approximately 27% of the year on average.

By the end of the year, 19 states plus the District of Columbia had active legal sports betting markets. Despite land-based casino closures and the suspension of major sporting events in the spring, sports betting saw significant growth, with Americans legally wagering more than US$21.5 billion on sports last year.

In a survey conducted in April 2020, AGA member company executives, including commercial and tribal operator and supplier CEOs and CFOs, estimated a revenue decline of slightly more than 40% in 2020 and a timetable for recovery of up to two years. Now, the Q1 of 2021 has shown commercial gaming revenue numbers tied for the highest-grossing quarterly total ever, suggesting a quicker recovery than anticipated.

In this regard, Bill Miller, president and CEO, AGA, indicated: “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 first quarter of 2021 clearly reveals that consumer interest in gaming never waned, despite the challenges of 2020. This momentum is a direct result of our industry’s ability to provide safe environments for our employees and guests to return to, and is a great indicator that our recovery is on the horizon.”

The AGA’s annual ‘State of the States’ report details the commercial gaming industry’s financial performance, including analyses of each of the 29 states and the District of Columbia that had commercial gaming operations in 2020. The investigation, developed with VIXIO GamblingCompliance, also provides a breakdown of the legality of types of gaming and number of casinos by state, summarizes major gaming policy discussions and previews opportunities and challenges for the industry.