The coronavirus outbreak, which first emerged in China in December 2019, left a massive impact on the economy of the entire world. The situation is getting worse and worse each day. The United States became the epicenter of the pandemic a few days ago. The numbers are growing rapidly and we are now looking at more than 1 million cases and over 50,000 deaths caused by the virus across the globe.
The US casino and gambling industry is not an exception. To encourage social distancing, brick and mortar casinos all over the United States are forced to close their doors to the public. The whole situation affected the online gambling industry in the opposite way. Since most of the US population is in quarantine and has much more spare time to enjoy their favorite casino games from the comfort of their homes, the online casinos are reporting significant revenue increases.
Most land-based casinos have their respective online branches and can benefit due to the mentioned rise in the players’ online activity. The SugarHouse Online Casinos are among those. They offer the customers a massive array of slots, video poker, and table games. Despite the aforementioned restrictions for the brick and mortar casinos, the online branches will save so many businesses, at the same time providing people with a safe environment for enjoying their favorite pastimes. Will the revenue be enough to compensate enormous losses caused by the shut-down of the land-based casinos, though?
Estimated Losses for the US Casino Industry
As per the latest reports by the American Gaming Association (AGA), the US economy will lose $21.3 billion in direct spending by consumers if casinos stay out of business for two months. Unfortunately, the two-month shutdown is the best-case scenario in current circumstances.
The vast majority of commercial casinos in the States were closed by early-April. The reports reveal we are talking about 94%. More than half a million of the casino industry workers (96% of the entire US gaming industry workforce) lost their jobs.
The representatives of this group are in constant negotiations with the White House and Congress, demanding packages that will provide measures to save the liquidity of these businesses.
Moving forward, the casino workers will thus lose around $60 billion annually in total wages. It is a significant hit for the economy of the entire country if we know this specific industry generates $34.4 billion in total tax revenue per year (on average).
What we also have to mention is that almost half of the aforementioned jobs are not bound to the gaming business. Hotels, local shops, and restaurants are all part of most brick and mortar casinos in the United States.
All Bets are Off in Las Vegas
It is hard to imagine the world’s gambling capital shut down for any betting-related pastime, but Nevada closed all casinos in mid-March due to the Covid-19 pandemic. Nevada’s Clark County reported more than 1,000 coronavirus cases and almost 30 deaths in early-April. Half a month ago, Governor Sisolak officially turned out the light and stopped the never-ending party.
Nevada depends on tourism more than any other state in the country. As per reports, around 42 million people visited Las Vegas two years ago (2018). The massive hotel chains such as MGM and Wynn were the first to close their doors to the public. Others, like Venetian, tried to prolong the shut-down all until the Governor announced disclosure.
Congress passed a $2 trillion bill as a relief plan to financially help the impacted businesses. Nevada’s casinos will get their portion in the shape of a $454 billion assistant package. Will it be enough to help the heavyweights such as Wynn Resorts, Sands Corp, and MGM Resorts International to recover from this horrific situation?
According to the Nevada Resort Association, the state’s unemployment rate will go to 30% at least. 320,000 workers rely on $1.3 billion in wages and salaries every month.
AC Casinos Reporting Deadline Pushed Back by Regulators
In Atlantic City, the quarterly casino profit filing deadline was scheduled for April 7th, but it had to be disrupted due to the Covid-19 crisis. The public information will thus not be released before May 7th according to the state’s Division of Gaming Enforcement. The governor closed the state’s nine land-based casinos on March 16th but allowed online gaming to be conducted regularly in New Jersey.
The situation with delays in reports is similar in all US states that have legalized gambling.
The closures in Ohio
Ohio were one of the last US states to have legalized gambling. Four brick and mortar casinos were opened between 2012 and 2013 in Cleveland, Cincinnati, Columbus, and Toledo. Nevertheless, unlike the case was with the casinos in all other states, the revenues of those in Ohio have been deteriorating over the years.
Even before the coronavirus emerged, the local land-based casinos were significantly hit by the rise of the online gambling industry. Brick and mortar casinos in Ohio face serious problems battling the online branches as the players received much more perks (including free spins and cash bonuses) by keeping their main action online. As a consequence, the local casinos introduced loyalty programs to promise their customers extra benefits.
Just when the local casinos began to retain the customers, they were hit with the coronavirus pandemic. The efforts thus counted for little as all gamblers were forced to play online. Governor Mike DeWine limited gatherings to 100 people or fewer as of March 13th. Soon after, Hollywood Casino Columbus and Toledo, JACK Casino Cincinnati, and JACK Cleveland Casino were all forced to close.
The impact of coronavirus on the entire economy of the United States is enormous. We are witnessing the end of a huge era of prosperity. Whenever this is over, there are no doubts the country and the economy will rise again. People will gather in Las Vegas again, and the players across the United States will enjoy their favorite games in brick and mortar casinos again.