US casino industry suffers biggest fall since 2003

By Noah Taylor Updated
US casino industry suffers biggest fall since 2003

The true extent of the coronavirus pandemic on US casinos has been revealed.

Forbes reports that US casinos’ revenue plunged 31.3 per cent to $30 billion in 2020, the lowest level since 2003, the American Gaming Association reports.

With the pandemic forcing casinos to shut down, a rise in online sports gambling helped soften the pain for some operators.

New Jersey bettors wagered $996.3 million in December, an all-time record for a single state in a single month and just north of $6 billion in total last year.

That’s a 33 per cent increase compared to the state’s 2019 total.

AGA president and chief executive officer Bill Miller said: “COVID-19 devastated our business and the employees and communities across the country that rely on casino gaming’s success.”

“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.”

According to the AGA, the annual US handle from sports betting gew 65 per cent in 2020 to $21.5 billion.

Revenue was also boosted by iGaming, which generated nearly $1.6 billion across four markets that were operational last year.

According to the AGA, the reduction in gaming revenue was far greater than the 8.4 per cent decrease recorded from 2007 to 2009 during the Great Recession.

Macau gaming figures on the up

The mass market growth of Macau’s casinos dramatically outpaced its flashier VIP counterparts in the third quarter, although the entire market remains down.

Calvin Ayre reported in October that Macau’s Gaming Inspection and Coordination Bureau released figures on Friday that showed total casino gaming revenue of just US$612 million in the three months ending September 30, which is a whopping 93 per cent decline on the same period last year, but a 51 per cent improvement on the preceding quarter.

The VIP baccarat segment accounted for 48 per cent of the quarter’s total, a fraction of the same period last year, but up 51 per cent sequentially.

VIP’s share of the overall pie increased slightly from quarter two, but nonetheless took a back seat to mass market gaming for the seventh straight quarter.

Mass market gaming, including slots, gained, driven by a 77 per cent boost in mass baccarat revenue.

Interestingly, slot machine revenue fell 13 per cent from the second quarter, despite the sector adding 649 machines to its total in a bid to tempt electronic gambling fans.

About the only cause for celebration in the quarter was Macau Slot’s sports lottery, which reported football betting revenue nearly tripled from quarter two.

The return of European major league play caused football turnover to triple, while basketball betting enjoyed a similarly dramatic revenue surge.

Macau’s gaming market has posted six straight months of annual declines of at least 90 per cent and the recent Golden Week holiday failed to deliver the traditional surge of mainland gamblers.

Sanford C Bernstein analysts estimated the average daily gambling revenue was down 76 per cent from last year’s holiday period, despite Beijing approving the resumption of travel from Guangdong province in late September.

Macau’s casino tax revenue on the up

Macau’s casino may have turned a corner, with a 52.4 per cent increase in tax revenue reported by the Financial Services Bureau in Macau for August. 

Calvin Ayre reported in September that the figure, $76.8 million, was a marked increase from a month earlier.

Despite the substantial monthly increase, Macau is still a long way off from its normal revenue levels.

The gross gaming revenue reported by the casinos remains flat and is down 94.5 per cent year-on-year.

The total GGR for the city’s casinos was $166.38 million, an indication that the relaxation of border restrictions has not had a huge impact on visitation to Macau’s casinos.

At the end of August, the cumulative total GGR for casinos in Macau had only reached $4.552 billion, an 81.6 per cent decrease compared to the same period last year.

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