The COVID-19 pandemic had an inevitable effect on the casino gaming industry in 2020. However, it appears that Pennsylvania casinos were not as impacted as other states, even though land-based casinos were closed for about a third of the year.
Casino closures and revenue loss
The pandemic closures resulted in revenue loss across all casinos but some were more affected than others. New Mexico saw the largest decline in revenue (79%) and some casinos in the state are still closed. In South Dakota, where shutdowns were only for a few weeks, there was only a 4.5% drop in revenue.
Pennsylvania casinos were initially closed from midway through March to the end of the first week in June. They were then allowed to open with restrictions, including only allowing them to operate at no more than 50% of their maximum occupancy.
Parx Casino in Pennsylvania was one of the affected land-based casinos. Fortunately, it is also a real money online casino and many people were betting online during the pandemic. On December 12, all Pennsylvania land-based casinos were once again required to close by Governor Wolf, increasing their losses.
PA casinos survive a tough year
Revenue did drop by 31% at Pennsylvania casinos in 2020. Slot revenue in 2020 was down from 2019 and revenue from table games was much lower. iGaming proved to be a real asset, especially during the long closures. This was Pennsylvania’s first full year of legal iGaming and its total reported revenue for the year was $565.8 million.
American Gaming Association (AGA) produces an annual report showing revenue, tax, and growth of all land-based and online casinos. It reported that Pennsylvania was able to collect more than double the tax revenue from gaming than any other state in 2020. One reason for this is it has one of the highest tax rates in the country.
One of the golden accounting rules is to debit what comes in and credit what goes out. What came into the coffers of the state was over a billion dollars in gaming tax revenue. This was about 20% less than it paid in 2019. The gaming tax revenue goes out to offset school taxes paid by property owners and some goes to local law enforcement grants and responsible gaming programs.
What does the future hold for Pennsylvania casinos?
As the economic recovery starts to take place, the future looks bright for Pennsylvania casinos. The AGA report is very positive about the future of gambling. The state saw strong growth in online sports betting in 2020, especially towards the end of the year, and there were 12 online sportsbooks in action by that time.