Massive Revenue Loss for US Continues in Q2
As the coronavirus pandemic rages on in the United States, reported earnings for the second fiscal quarter demonstrated a startling 79% drop in revenue. The new numbers come from the brand-new Commercial Gaming Revenue Tracker, which analyzes financial patterns across the gambling industry on a state-by-state basis. The CGRT is powered by the American Gaming Association. This report, released summer 2020, analyzed the impact of the coronavirus during the second fiscal quarter on the US gambling industry.
The gambling industry in the US was hard-hit by mandated closures during fiscal Q2 in 2020. ©MiroslavaChrienova/Pixabay
2020 Findings from CGRT Show Massive Losses
The results of the American Gaming Association’s latest study demonstrated that the gross gaming revenue was down across sectors, including brick and mortar casinos and sportsbook betting. The report explained a number of reasons why these numbers were so particularly low: lockdowns in the US started and ended during Q2.
These lockdowns also included the indefinite postponement or out-and-out cancellation of most sporting events, including — in an unprecedented twist — the entire NBA season. Though closures and reopening measures have varied state to state, in general, revenue dipped the lowest during April and May, regaining traction in June.
The Impact on Sportsbooks
One section of the AGA’s 2020 report included a section about the impact of coronavirus and ensuing lockdowns on the world of sports betting. According to the report, sportsbook revenue decreased 46.3% from quarter two revenue in 2019 — the first time this has happened since the US ban on sports betting was lifted several years ago.
According to the findings of the American Gaming Association, the negative impact on sportsbook revenue during quarter two of 2020 can be attributed to COVID-19’s impact on the world of sports overall, as well as slow progress across several US states which bars gamblers from registering to place sports bets remotely.
As such, enthusiastic sports bettors in states including Nevada, Rhode Island, and Iowa were unable to place bets on the few remaining sports there were (or on the other creative things the sports betting industry dreamed up to allow these bettors to place bets on), because their state did not provide online registration for sports betting accounts.
Changing Bettor Behavior During Pandemic
Interestingly, a report this summer — after the end of fiscal quarter two 2020, which ended on June 30 — of gambling behavior in the US found that more gamblers were turning to legal sports betting during the pandemic, rather than using illegal bookmakers to place their bets.
The survey surveyed its participants on what was encouraging their shifting behavior. One-quarter of survey-takers said that they believed a legitimate sports betting site would be more likely to pay them, while close to a quarter (20%) said the pandemic had introduced them to new online sports betting options they hadn’t known about.
Casinos Hard-Hit
The revenue loss for brick-and-mortar casinos in the US was by far and away the starkest during largely nationwide lockdown measures across the second fiscal quarter of 2020. In total, the US has 989 casinos, which declared a joint total of $2.3 billion in revenue during Q2.
This demonstrates a startling 79% tumble from 2019’s second fiscal quarter. While massive losses are, at this point, no surprise, the timing of the coronavirus pandemic is surely felt as unfortunate to casino industry leaders in the US, who started this year with strong returns for both January and February.
In fact, in the first quarter of 2020, January and February saw a year-over-year increase from the same period in 2019. For those two months, before the US had its first reported case of COVID-19, casino revenue had increased by 10.6%. Then, of course, March came, and with it, the pandemic.
As closures enfolded the US casino industry during the spring, May and June of Q2 saw the majority of the US’s 989 casinos reopen for business — a statistic the American Gaming Association cites as 4 in 5 casinos. As of June 30, 388 commercial casinos had also reopened, comprising reopenings in 18 out of the 25 states where casinos are located.
As Reopening Begins, Casinos Bounce Back
As the summer came, US states began to loosen their approach to the coronavirus lockdowns. This measure was not because of decreasing numbers of coronavirus cases — sadly, coronavirus cases continued to skyrocket through the summer. However, public demand and economic necessity encouraged businesses to reopen.
The reopening of casinos in the US ushered in welcome revenue in impressive numbers, particularly considering how stringent most casinos have to be about the number of guests they are able to host, as well as additional unpopular rules about necessary mask-wearing and, in some cases, banning the consumption of alcohol.
Several states saw reopening numbers approach what they had been even before the pandemic. One such state was Indiana, whose casinos were open for a joint total of 208 days during the second quarter of 2020, and still managed to have 7.6% growth from its second quarter of 2019. In Q2 of 2020, Indiana casinos raked in $505,104, compared to $470,189 in Q2 of 2019.
Indiana was not the only state to have this surprising result. Delaware, South Dakota, Oklahoma, and Ohio all had revenue growth during 2020’s second quarter. The most significant growth was seen in South Dakota, which saw a 42.5% increase in revenue during its casinos joint 955 days open in the second quarter.
Still, South Dakota revenue remains somewhat small: even in a quarter of significant growth, South Dakota casinos declared revenue of just over $20,000 for the second quarter of this year, compared to $14,000 from last year. Oklahoma also fared well, with casinos only open a joint total of 64 days in the second quarter.
Somehow, Oklahoma’s casinos managed to improve 9.6% in revenue earnings, despite only being open for a combined total of just over two months. In 2019, Oklahoma’s casinos were open for a joint total of 182 days. In the second quarter of 2020, Oklahoma casinos made $210,995, compared to $192,437 in 2019.
