The COVID-19 Pandemic Has Devastated the Gambling Economy

In the past months, news of the growth of online gaming during the pandemic has been quite prominent. However, it appears gambling has not benefited from the online gaming boom. While Sony and Microsoft are preparing for relatively robust demand for their next-generation gaming consoles, luck has not been on the side of gambling operators.

A massive decline

A trade report by the American Gaming Association (AGA) says that commercial gambling revenue in the United States suffered a 79% drop in the second quarter of 2020. The CEO of AGA, Bill Miller, explained in an interview with the Associated Press how the pandemic had decimated their industry. He referred to COVID-19 as the “most difficult economic challenge” encountered by the gaming industry.

The devastation has reportedly resulted in a loss of $261 billion. Income generated by slot machines and table games, according to Miller, have flattened. The reason for this drastic decline is the forced shutdown of casino operations for several weeks in response to the pandemic.

The massive revenue decline is in stark contrast to the record revenue reported in 2019. Despite this, Miller is optimistic that recovery is on the horizon. For now, only online gambling operations are thriving. Sites like yourlottoservice.co.uk are making profits, as they are not covered by the physical distancing and community quarantine guidelines.

Sports betting and iGaming are the only segments of the gambling industry that have manifested growth in the first semester of 2020. Interestingly, sports betting managed to record growth despite the numerous cancellations of sports events.

Recovery expected sooner than later

One of the things that convinces Miller that recovery will happen soon is the report of nearly 300 casinos that reopened in June. While April and May’s revenues have fallen by 90% year-over-year, an overwhelming majority of commercial gambling operations have already started serving customers. 

Miller said that over 85% of casinos in the United States have already restarted their activities. They have reopened in accordance with the health guidelines and safety plans required by regulators. Nobody is expecting that things will return to the way they were. Casinos are bound to experience considerable revenue decreases, even with businesses already reopening. However, industry players anticipate better developments in the next few months.

In the meantime, operators will have to rely on online modes of doing business. Sports betting entered 2020 with a strong start as more states started legalizing it. The growth trajectory will likely recover as sporting events are slowly making a comeback. iGaming, which is legal in only five states, is set to generate more revenues. According to the Las Vegas Review-Journal, iGaming reached a milestone by out-earning the sports betting segment for the first time in the second quarter of 2020.

The devastation of the pandemic across industries is not unexpected. Even gambling has not evaded it. However, the outlook for the industry is not as dismal as what many may perceive. Most industry observers have positive projections. Recovery may not happen very soon, but it will eventually come while businesses are still surviving.

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