US Gaming and Casino Industry Insights 2020-2021

A Bad Year Was a Good Bet With the leisure & hospitality, entertainment and recreation sectors all devastated during 2020, it was a good bet the gaming and casino industry would suffer similarly and total US commercial gaming revenues decreased 31.3% YOY to $29.98 billion. The 27% of normal operating days commercial casinos lost during 2020 mirrored the percentage loss of 2020 revenues, which impacted direct tax revenues, which decreased 34.2% YOY to a total of $6.69 billion. The 2020 results would have been much worse without the 68.9% YOY increase in legal sports betting, to $1.5 billion (a record) and iGaming revenues of $1.55 billion.

A Welcomed Win Streak Many gaming establishments and casinos had to close 15 months ago, but as of February 2021 911 of 998 were open, which helped to improve Q4 2020 total gross gaming revenues to $9.19 billion, a 16.5% YOY decrease, but approximately half of the total 2020 loss. April 2021 total gross gaming revenues was an even bigger step forward, as that was a 26.4% increase from April 2019 and +3,161% from April 2020. Only the table- game vertical experienced a decrease of 4.4% from April 2019 while the slots vertical increased 18%. Total gross gaming revenues for the first four months of 2021 were $15.56 billion, a 9.6% YOY increase from January April 2019 and +62.2% from January April 2020. Again, the table-game vertical had the only decrease or 18.5% from 2019, but +20.5% from 2020.

States Would Rather Forget 2020 The 31.3% YOY decrease in total 2020 gross gaming revenues is obviously reflected in individual states revenues as 29 of the 30 states with commercial casinos suffered double-digit declines, except for South Dakota with a 4.5% YOY decrease. States where COVID-19 infections were the worse or where they weren t allowed to reopen for months had the worst decreases: New Mexico -78.8%, New York -56.6%, Michigan -56.1% and Rhode Island -51.2%. Conversely, as the gaming and casino industry has rebounded during the first four months of 2021, all the states April 2021 gross gaming revenues increased compared to 2019, except three, Rhode Island -14.9%, West Virginia 9.3% and Maine -2.5%.

States Gaming Profiles The types of gaming available to players in each state depend on the specific laws. For example, 25 states have commercial casinos, 29 have tribal casinos, 5 have card rooms, 11 electronic gaming devices and 20 single- game sports betting. The legal age is 21 in all states with legal gaming, except 18 in Oklahoma and Rhode Island. Only New Mexico has restricted operating hours. Fourteen states allow the serving of complimentary alcohol while 11 states do not allow it. Unsurprisingly, Nevada has the most land-based casinos with 215. Louisiana, Mississippi and Missouri have the most riverboat casinos with 13 each; Montana the most card rooms with 113; and Illinois with the most gaming device locations with 7,233.

Tribal Casinos Embrace Sports Betting 2020 was the first year every US tribal gaming operation was closed for some period or an average of approximately three months. The vast majority of them were opened by the end of 2020, but 13% were still closed. Tribal casino revenues are usually reported a year later than the overall gaming and casino industry, and the 2019 total was $33.72 billion. During July 2020, one industry analyst projected only $20 billion in 2020 revenues, by revised that forecast to $25 billion. Although many sovereign tribes have been reluctant to add sports betting at their casinos, their 2020 experience and the outstanding performance of sports betting resulted in seven of the 29 states with tribal casinos allowing sports betting by the end of 2020.

Identifying Casino Visitors Data from The Media Audit reflects the significant decrease in 2020 gaming revenues. The early 60- Market 2020 Aggregate Survey revealed 17.2% of adults 18+ had visited a casino during the past year compared to 14.0% in the later 62-Market 2020 Aggregate Survey. In both surveys, slightly more women than men visited a casino during the past year and adults 25 44 (approximately 32% in both surveys) and adults 50 74 (46.6% and 44.2%, respectively) were the largest age groups. Those adults 18+ with household incomes of $35K $75K and $75K $150K were the primary visitors of casinos, with both groups in both surveys between 31.3% and 34.1%.

Advertising Strategies As gaming and casino restrictions continue to be lifted, these businesses will want to advertise aggressively with promotions/special offers to attract a maximum number of loyal patrons and new patrons eager for gaming s entertainment value. Gaming establishments and casinos without hotels and restaurants will find it advantageous to cross-promote with nearby hotels and restaurants to help attract more tourists and revitalize the overall leisure & hospitality sector. With more states legalizing sports betting, gaming establishments and casinos will want to announce the addition of sports betting and feature onsite amenities related to sports betting that will attract more wagers.

New Media Strategies Although most gaming establishments and casinos are open, they will want to use social media to provide the latest information about any remaining restrictions as well as showcasing expansion plans and improvements during the pandemic. For younger adults who are casino patrons, encourage social media posts, especially short videos, of how they are dressing for their visit, what games they want to play and the amenities they specifically like. Use social media to ask the older adults who are casino patrons to explain their strategies and share any tips or hints about how they play the various games to win.