Sports Betting, iGaming Highlights in Down Year for Casinos

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.

Largest Losses for States With Casinos

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.

Sports Betting Handle Nationwide Hits $21.5 Billion

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.