September 9, 2020
US commercial gaming revenue contracted by over 78.8% in Q2 2020 due to nationwide COVID-19 lockdown. According to the American Gaming Association (AGA), the industry generated a measly $2.3 billion in revenue between April and June this year.
While slot machine revenue stooped by 81.9%, table games contracted by 86%. Sports betting took a substantial hit, recording a downtrend of 46.6%. The only saving grace for the AGA was iGaming revenue, which picked up significantly amidst quarantine.
Year-on-Year Revenue Drop in Q2 2020
Online gaming revenue recorded a steep rise of 253.8%, generating $402.7 million in Q2, 2020. Contrary to current figures, 2020 opened strong as commercial casinos demonstrated a steady demand in the first quarter. At the time casinos shut shop in March, revenue was up 10.4% compared to the same period last year.
The picture quickly changed in April and May, as casinos remained out of business. However, the pace picked up as soon as the Federal Government eased regulations in June. Currently, 85% of US casinos are operating with limited guests, generating four times the revenue recorded in the previous two months.
As businesses resume with new restrictions in place, the gambling industry too must innovate to survive. And there is a silver lining. The iGaming industry grew four times compared to last year and this hasn’t gone unnoticed!
Popular casino games like poker, blackjack, and slots are the new favourite among America’s amateur iGamers and veteran gamblers looking for respite. And the results are evident! Online gambling and sports betting revenue continued growing amid lockdown, even as revenue from brick-and-mortar establishments declined by over 80%.
iGaming Revenue on the Rise Despite Restrictions
A couple of big players in the iGaming industry experienced an outreach over $12 billion, outclassing traditional entertainment giants like Caesars and MGM Resorts. However, online revenue streams have greater potential. Especially in the sports betting market.
With conventional sporting events postponed during COVID-19, all eyes are now on esports. And the industry is growing at an alarming rate. This is especially curious since online gambling laws are stricter than brick-and-mortar establishments. While gambling is legal in just five US states – Nevada, Pennsylvania, West Virginia, Delaware, and New Jersey, restrictions on online gambling are far serious.
iGaming credentials are mostly limited to slots, as online operators aren’t allowed to offer poker and similar popular card games, fearing a direct clash with physical casinos, consequently affecting their business. Sports betting is more prevalent, as over 22 US states allow online wagering. Since most major sports tournaments were postponed due to COVID-19, the huge bump in iGaming revenue throws light on the shifting trends.
A few states started noticing the uptrend in online gaming and steps to legalize the industry could be in store. As authorities scramble to fill State coffers following the lockdown, more States could legalize iGaming in the upcoming days. While the demand for online casinos is on the rise, their revenue streams continue being overshadowed by physical casinos.
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