US gaming industry sees first annual market contraction since 2014

U.S. commercial gaming revenue totaled $30.0 billion in 2020, down more than 31% year-over-year, according to the American Gaming Association’s (AGA) Commercial Gaming Revenue Tracker. Last year marked the first market contraction for the U.S. gaming industry since 2014 and the lowest gaming revenue total since 2003. 

The year ended with some positive momentum in the fourth quarter, with a 1.7% increase in revenue over Q3 2020. The nearly $9.2 billion in revenue still represented a 17% year-over-year decrease.     

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

Commercial casinos lost 27% of normal operating days throughout 2020 because of mandated COVID-19 closures and, to a lesser degree, disruptions caused by hurricanes along the Gulf Coast. 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, according to AGA's report. 

The impact of COVID-19 on the casino industry extends beyond gaming revenue. Live entertainment, tourism, and meetings and conventions — which make up more than half of casino resort revenue in tourist destinations like the Las Vegas Strip — all came to a standstill in 2020 and are only now starting to reopen. 

“Hospitality and travel have been among the sectors hardest hit by the pandemic. I am encouraged by recent bipartisan momentum on Capitol Hill to support these industries, which are crucial to our nation’s full economic recovery,” Miller said.

The reopening of casino properties started in mid-2020, with 911 out of 998 U.S. casinos open today. AGA research shows about one-in-three American adults plan to visit a casino in 2021 — near the highest rate since the AGA began tracking last March. About 80% of future casino visitors agree the industry has done a good job at safely reopening.

Gaming’s performance in 2020 was buoyed by the growth of new gaming options, with legal sports betting garnering an all-time high of $1.5 billion in revenue, up 69% year-over-year, and iGaming revenue nearly tripling to almost $1.6 billion. 

In the last three months of the year, sports betting generated $860.4 million in revenue, up 146% from the third quarter, while iGaming revenue reached $484.3 million, an increase of 11% from Q3. New markets and consumer demand also grew the annual U.S. handle by 65% to $21.5 billion despite widespread sportsbook shutdowns and an abbreviated calendar of major sporting events.