COVID-19 didn’t spare U.S. casinos from its vast grip last year, but as casino revenues depressed across the country sports betting and iGaming hit record-breaking figures.
U.S. commercial casino gaming revenue (GGR) was $30 billion in 2020, down 31% from 2019 and the first market contraction since 2014, according to the American Gaming Association’s Commercial Gaming Revenue Tracker report, issued this week.
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The pandemic-driven decline marked the lowest revenue level since $28.7 billion in 2003 — when there was legal gaming in 11 states, almost a third of last year’s jurisdictions — and overshadowed prior slumps like during a two-year span of the Great Recession when gaming revenue decreased 8.4% from 2007-2009, according to the AGA report.
Sports betting and iGaming, however, produced soaring revenues that fueled overall gaming revenue’s 1.7% improvement between quarters three and four to cap an otherwise hampered year. Sports betting generated $860.4 million from October-December, up 146% from July-September. Revenue from iGaming increased 11% from the third quarter at $484.3 million.
Nationwide, GGR was nearly $9.2 billion in the fourth quarter, a 17% downturn from the same period in 2019.
Before March 2020, when measures to stop the spread of COVID-19 saw casinos around the country shut down, some for months at a time, a record year seemed to be on deck for the gaming industry. Casinos experienced an 11.4% revenue growth in the first two months compared to that period in 2019.
At state levels, the annual drops were largest in New Mexico (down 79%), New York (57%), Michigan (56%) and Rhode Island (51%). These specific decreases reflect persistent closures from the initial March shutdown (New Mexico), later than national-average re-openings of state casinos (Michigan and New York) and secondary reclosures (Rhode Island).
Revenue dipped in all 24 commercial gaming states that have full year-over-year comparisons available. Still, outside of longtime industry leader Nevada, New Jersey and Pennsylvania had the best figures for 2020 commercial gaming revenue.
New Jersey generated $2.88 billion and Pennsylvania saw $2.69 billion in revenue — the only markets to join such a category with Nevada at $7.87 billion.
The two East Coast states also trailed only Nevada with high marks in the fourth quarter at $940 million (NJ) and $792 million (PA). Nevada’s fourth-quarter revenue was $2.27 billion.
New Jersey led the country in 2020 sports betting handle with $6 billion and the nationwide market welcomed seven new jurisdictions into the fold last year.
New and existing markets grew the annual U.S. handle in the face of a truncated sports calendar to $21.5 billion for a 65% increase. Year-over-year revenue was up 69% to more than $1.5 billion.
Illinois and Colorado enjoyed the biggest booms among last year’s newly minted sports betting markets. Their handles reached $1.88 billion and $1.18 billion, respectively, with $125.5 million and $75.8 million in revenue.
iGaming revenue tripled its 2019 take with nearly $1.6 billion last year. Sports betting and iGaming GGR as a share of total gaming revenue spiked the most from the first to second quarter in New Jersey and Pennsylvania markets. New Jersey went from 35 to 100% and Pennsylvania from 15 to 70%. The national average in that span increased from 5 to 20%.
Sports betting and iGaming revenues combined to account for more than 10% of annual GGR – a 7% increase from 2019 — soothing the hurt COVID-19 put on casino gaming revenue for most of 2020.