Nation’s commercial casinos produced record revenue in 2021
$6,000 Welcome Bonus
The nation’s commercial casinos generated more revenue in 2021 than any other year in the industry’s history, the American Gaming Association reported Tuesday.
Gross gaming revenue reached $53 billion, breaking the previous industry record of $43.65 billion, set in 2019, by more than 21 percent.
“These results are nothing short of remarkable,” said AGA President and CEO Bill Miller. “The success of 2021 reflects our commitment to health and safety and how Americans have welcomed gaming’s expansion across the country. Today’s industry is effectively meeting customers how and where they want to engage — whether at a casino or through mobile gaming.”
‘Wildly popular form of entertainment’
Brendan Bussmann, director of government affairs for Las Vegas-based Global Market Advisors, said he wasn’t surprised by the numbers, based on the months leading up to the end of the year.
“2020 being the partial year that it was set up for a good 2021,” Bussmann said. “It just shows that gaming is a wildly popular form of entertainment and continues to grow across the country. It’s one that people enjoy and continually find ways to partake in, whether it be through traditional casino gaming or sports betting or the eventual probability of iGaming as an acceptable form of entertainment.”
Miller said traditional brick-and-mortar gaming led the industry’s recovery, with 2021 combined slot and table gaming revenue totaling $44.94 billion, a 6.6 percent increase over 2019’s previous record.
Sports betting’s growth accelerated in 2021, generating $57.22 billion in handle and $4.29 billion in revenue — jumps of 165 percent and 177 percent, respectively, over 2020.
The sector’s all-time high was powered by strong demand in established markets of Nevada, New Jersey and Pennsylvania and further boosted by the launch of seven new commercial sports betting markets in Arizona, Connecticut, Louisiana, Maryland, South Dakota, Virginia and Wyoming.
Two new iGaming markets, Connecticut and Michigan, also opened in 2021, helping the sector to a record $3.71 billion in revenue. Combined sports betting and iGaming revenue for the year totaled $8 billion, up 158 percent from 2020 and accounting for a record 15.1 percent of annual industry gaming revenue.
“Despite our record-setting year, gaming’s total recovery is still reliant on the full return of travel and large events, which requires a safe health environment and open economy,” Miller said. “I’m optimistic that we will see continued growth throughout 2022.”
While casino revenue has been strong in Nevada with 10 consecutive months of gaming win in excess of $1 billion, industry observers believe there’s still room for growth with international tourism remaining below pre-pandemic levels and midweek occupancy rates off as a result of lower attendance at conventions and meetings.
UNLV ombudsman and gaming historian David Schwartz said the record numbers weren’t all that startling, given the current conditions and overall expansion of gaming.
“We’ve had inflation, so that’s naturally going to cause a rise in gaming revenues. And we’ve also seen expansion in a lot of areas, like sports betting, that might have drawn more new eyes to the product,” he said.
Just how long the revenue growth trend could last is hard to say, Schwartz said.
“A lot of that depends on the overall economic outlook, which as we know is anything but certain,” he said. “At some point, there’s going to be a new equilibrium.”
Sports wagering’s role
While records were set for commercial casinos, sports wagering played a significant role driving patrons to casinos and bets on the Super Bowl gave 2022 a boost toward more high marks.
On Monday, the Nevada Gaming Control Board announced that the 179 sports books in the state’s casinos took a record $179.8 million in Super Bowl LVI wagers.
The state’s books won $15.4 million on Sunday’s game, won 23-20 by the Los Angeles Rams over the Cincinnati Bengals, for a hold, or win percentage, of 8.6 percent.
While Nevada experienced a record Super Bowl, many eyes were on New York, where sports wagering has been in place for about a month. The state reported it collected $1.98 billion in wagers over the first 30 days of mobile sports betting. With the state’s 51 percent tax rate in place, New York reported $138 million in operator revenue and $70.6 million in tax revenue – which was more in state and local tax revenue than all but three states produced in all of 2021, Pennsylvania, $122.5 million, New Jersey, $122 million, and Illinois, $84.7 million.
“The 51 percent tax rate is a serious point of contention, but there is no question that it has been beneficial for the state so far,” said Mike Mazzeo, lead analyst for PlayNY.com, which monitors New York gaming statistics. “Operators’ long-term profitability is still an open question, but the immediate results are certainly eye-catching.”
Cautionary note
Bussmann said the Super Bowl boost in Nevada helped produce a good start for the state, but there may be headwinds on the horizon.
“Obviously, January might be a little tricky with the latest variant and maybe how that impacted life across all segments in the United States,” Bussmann said. “But clearly the leisure customer enjoys getting out and participating, whether that be at a local gaming facility in the Midwest, the Northeast or the South or coming to Vegas.
“I think 2022 could offer some interesting dynamics,” he said. “Obviously, we’ve seen, especially in the last couple of weeks as inflation numbers come out, that the wallet is tightening with the dollar. It isn’t necessarily an impact on gaming; it’s an impact on the entire economy.”
Bussmann said he even heard CNBC reference “the R word — recession” in broadcasts Tuesday.
“I think gaming will continue to do well, but economic headwinds can deter continued growth at the rate we saw in ’21,” he said.
