Amidst a pandemic, after more than six months of worldwide panic and strict regulation, we are just beginning to get a clearer picture of the impact this situation has had and will have on the global economy. Many industries have felt the blunt force of these circumstances as revenues drop, and analysts are not only calculating if survival is likely, but if at all possible.

Casino Industry Forecast 2021 Casino Industry Forecast 2021 Photo: Pixabay

The casino industry is among those feeling this punch the hardest. Ever since February, land-based casinos around the world started closing for a minimum of two months. After slowly reopening in specific regions, they had to do so under stringent criteria, implementing mandatory face-coverings, disinfecting procedures, and social distancing guidelines, which had these venues operating at half-capacity. For an industry dependent on tourism, drive-in traffic, and social interaction, the new state of affairs crippled the casino business. Some gambling hot-spots remained closed until August, and a few Vegas casinos still haven’t opened.

According to the GBGC (Global Betting and Gaming Consultants), as expected, casino gaming will lose a quarter of its revenues in 2020. While trends of recovery are visible in some parts of the world, estimates say that the industry’s stabilization will continue in 2021. It will take until 2023 to reclaim its position at the start of 2020 and begin experiencing growth again.

Many gambling hubs rely on inbound visitation, air capacity, and conventions. Thus, as other areas of society return to normal, so should gambling enterprises. For now, online platforms are booming, and sports betting has made a strong return, as in the US, New Jersey saw $315 million in bets in July, and Indiana sports betting surged 138% in the same month. However, let us look at how the casino industry is faring around the globe.

UK Casino Industry

Casinos in the UK shut down in late-March, and they were going to make a return on August 1st. Nevertheless, the date got pushed back, as prime Minister Boris Johnson did a 180 on his plans to reopen casinos. After many discussions and a long wait, they finally opened their doors on August 15th. However, the two-week delay cost operators in England £14 million.

Grosvenor Casinos said that they instantly reopened 35 of their 46 casinos in England, with Genting UK stating that they too opened most of their establishments on August 15th. A spokesman from Genting said: "We have been building towards this for some time now. Delays have been hugely frustrating and damaging to business." The reopening comes as a relief to the 12,000 people employed in the casino sector in England. Scottish and Wales gaming venues were a bit behind, as they were going to reopen August 24th, but did so a few days later. 

The Betting and Gaming Council describes that the UK casino industry is an essential part of the leisure and hospitality sector, which provides more than £300 million in taxes every year. Therefore, they believe that they are in line for government assistance, as they will be lucky to break even over the next 12 to 18 months, with 2022 having the potential to be a more normalized year.

Europe Gambling Industry Status

If we look at an overview of the European land-based gaming market, we can see an industry that generates around €77 billion annually. Take the UK out of the equation. The region with the second-most casino visits in Europe, only behind France, and if we focus on gross gaming revenues, we can see that Italy is the leader with €18 billion per year, with Germany trailing behind with €14 billion. Though the mainland European gambling market has been stable for the past fifteen or so years, with annual revenues hovering around €70 billion, it seems like all will change soon.

Most mainland European countries shut down gambling venues in March, with countries like the Czech Republic, France being among the first to open at the start of June, and Italy following suit mid-month. The reopening did little to save the European casino industry year, as Dutch state-owned Holland Casino posted a loss of €28m in the first half of 2020. Turnover tumbled 60% due to the lockdown. In Austria, Casinos Austria International reported that revenues are down more than 30% for the first half of 2020. The German gaming giant Gauselmann Group put 13,500 employees on leave, while all board members waived 50% of their salary to help mitigate losses during this crisis.

What is of note is that revenues were up in most markets in the first quarter of 2020, before the pandemic hit. For instance, in Spain, gambling revenues were up 12.5% in Q1.

2020 USA Casino Industry Performance

Many speculate that within three years, the USA casino industry can heal from what has transpired in 2020. According to analyst Chad Beynon, “With a vaccine, the Vegas market will recover, and signs point to 2023 being the break-even year”. In Nevada, tourism generates around $19 billion to the state’s gross domestic product and supports close to half a million casino gaming industry jobs. If resorts remain closed for 90 days, estimates say that that may mean that hospitality employees will lose an estimated $7.7 billion in pay the next year and a half.

As the USA casino industry plummets, with revenues dropping 79%, so does employment in the sector. MGM Resorts has terminated over 18,000 jobs in the country, with a good chunk of these cuts in Nevada. These shifts have made the industry market their services to locals, with campaigns such as “Discover Your Nevada.”

The industry also took a hit by not regulating online casinos before the pandemic, while doing so with sportsbooks, which were forced to stop all work due to no sports functioning during the quarantine. Offshore gambling sites, however, saw a surge in new users. As stated by Neil White from review site “Between April and June, we monitored a spike between 150% to %230% in new activity on  online slot casinos  and poker sites. This is mostly sportsbooks users shifting their account balance to other gaming products, and people having more time available at home to play online leisure games.” Elsewhere, Louisiana, one of the largest casino industries in the South, has been heavily affected by the regulation over the past six months. News out of the state suggests that many of Louisiana’s casinos are up for sale. Harrah’s Downs Casino, Racing & Entertainment sold to Rubico Acquisition Corp. Caesars Entertainment, and VICI Properties gave it away for $22 million. The same thing seems to be happening around the country as Station Casinos listed its two Reno properties for sale.

According to Bill Miller, an American Gaming Association CEO, “This is undoubtedly the most difficult economic challenge the industry has ever faced. Yet, our resilience amid such adversity is evidence of our foundation for continued success.” With more than 85% of casinos open, many are hoping for a return to normalcy. The same occurrence as the sports betting sector is experiencing. Something similar to what’s happening in Indiana, where July’s gross gaming revenue from casino games and sports betting was only $10 million off from July of 2019.

The Casino Industry in Asia in 2020

Things were not looking well for the gambling mecca, Macau, in August. As the table games win per unit per day at The Venetian was only $95, down from $13,500 in 2019. Slots didn’t fare any better, as they were at $18, compared to $294 in 2019. At Parisian Macao, tables lost $850 per day. However, the average Macau daily casino GGR in the first week of September doubled the daily rate across August. Analysts Tianjiao Yu, Vitaly Umansky, and Kelsey Zhu suggest that “With a visa issuance timetable, we believe the drivers of recovery will be confidence levels of customers to travel and spend.”

That said, while the restoration of visas, as well as the lifting of the quarantine imposed after a return for Macau visitors, bodes well for the particular administrative region, China announced a blacklist of other overseas gambling destinations. Vietnam is one of the speculated countries, as is Singapore, which may be crippling to these nations’ gambling industries, as they depend on the influx of Chinese players. Vietnam alone welcomes around 6 million Chinese visitors, and experts forecast a decline in Singapore’s 65% gambling revenues in 2020.

In other regions, South Korea’s Kangwon Land, the only casino open to residents, announced that it opens to the public on September 21st, while Paradise Co, the largest foreigner-only casino operator, reported that their revenues are stable month-on-month. Nonetheless, going by year-on-year comparisons, the August figures are down 75% from those in 2019.

Whether the Asia casino industry will recover depends on the risk of another wave of lockdowns, unemployment reducing disposable income, travel restrictions, regulators extending working hours, and reducing gambling taxes. Japan legalized gambling in 2018, but companies such as MGM Resorts International are now wary of breaking into the country’s casino industry due to the ongoing situation. Two years ago, MGM Resorts, Las Vegas Sands, and Wynn Resorts expressed a desire to run one of Japan’s three casinos, but there seems to have been a heart change. The licensing process has been a significant hurdle, and now with the global pandemic, all three gambling giants seem to have decided to stay away.

Is the casino industry recovering?                     

Well, it’s on the road to making a comeback, slowly. However, accurate assessments on whether it can soon return to where it was before the pandemic hit vary. In large part, this occurrence depends on laxer regulation and guidelines, the lifting of travel bans, and other factors stifling the industry and shrinking revenues. According to Fitch Ratings, the US casino market will start rebounding in 2021, but it will not be until 2023 when a full return happens. Experts think that Macau will recover much faster, as it’s dependent mainly on China, and as far as Europe goes, the belief is that its market will recover swifter than the US one.