The global pandemic has had a devastating effect on many industries across the globe. From retail to hospitality, practically every industry has suffered in some way. One industry that the pandemic has had a significant impact on is the gambling industry, but not quite in the way you might expect.
While the land-based gambling industry suffered heavy losses, the online industry enjoyed a boom to rival the online poker boom of the early 2000s. Here we take a closer look at those losses and gains and how the land-based industry has recovered.
Land-based casinos lose out
Enforced lockdowns, mask mandates, and forced closures due to staff shortages — the land-based casino industry felt the brunt of the pandemic. In Macau, Asia’s rival to Las Vegas, gambling revenues dropped by an incredible 93.2% during May of 2020 when the first lockdown took place. Over two years later, the industry in the island territory is only just starting to recover despite continued travel restrictions put in place by the Chinese government.
In Las Vegas, the impact wasn’t quite so dramatic, but revenues for casinos in March of 2020 when the first lockdowns came into effect dropped by 39.57%. The same period saw the entire state of Nevada report a drop of 53.38% in revenue.
And this was in the first month alone. These losses continued for a sustained period even after casinos were allowed to reopen at limited capacities.
Online gambling surges
Despite the forced closures of casinos across the globe and the postponement of many sporting leagues, gamblers still wanted to gamble. This led to something of a boom in the online gambling industry.
According to a poll of 5,800 Americans, online spending on gambling increased during 2021, a year after the pandemic had started. The study also found that 5 out of 10 people had used part of their stimulus check to fund vices such as gambling.
The UK Gambling Commission reported a surge in online gambling throughout the same period with. According to its data, mean days played per week by online gamblers rose from 2.35 days to 3.80 days while in-app purchases grew from £6.05 to £18.40 per month.
The Gambling Commission also reported that 2020 saw growth of 78% in the online gambling industry compared to 62% growth in 2019. This period saw a 30% increase in the number of people signing up for online casinos with 5% of that figure being first-time gamblers.
The research surveyed consumers and noted that the primary reason for people taking up online gambling was that they could not go out (51% of those surveyed) and boredom (34%) while 28% of those surveyed said that financial pressure pushed them to take up online gambling.
But perhaps the most telling stat is the fact that 23% of all people across the world spent at least 1 hour playing online casino games during 2020. So while land-based casinos suffered, the online industry flourished like never before.
An impressive recovery in the USA
Macau could take a considerably long time to recover and some analysts predict that casino debt in the territory could hit $25 billion by the end of 2022. However, things have gone very differently in Nevada.
As casinos have reopened, the state has hit some significant milestones. April of 2022 marked the 14th month in a row that the state’s casinos reported more than $1 billion in revenue. This remarkable turnaround in fortune has seen the industry recover to pre pandemic levels and then some. This recovery extends to other states as many gaming regulators in jurisdictions such as New Jersey and Pennsylvania have reported record revenues since the full reopening of casinos.
This is, of course, somewhat related to the growing rise of sports betting. Since the Supreme Court ruled in 2018 that a federal ban on sports betting was illegal, the floodgates have opened. More than half the states and jurisdictions in the USA now have regulated sports betting markets.
The global pandemic certainly had a significant impact on the gambling industry, and this impact continues to be felt in areas such as Macau where restrictions are still in place. However, in the USA and UK where the industry has fully reopened, we can see that the land-based industry has recovered and, in fact, flourished while the online industry has attracted new customers and continues to grow at a rapid pace.
