For December 2020, the three Massachusetts casinos reported less than $50 million in gross gaming revenue. It was a decline of 40 percent from December 2019. The casinos in Massachusetts, like those everywhere in the country, are suffering the impacts of government operating restrictions and a customer base leery of being in public. The nation and the gaming industry are approaching the one-year anniversary of the beginning of the COVID-19 crisis. Macau marked the one-year anniversary of its first case of COVID-19 on January 22, 2021; its casinos closed for two weeks beginning on February 4, 2020.
Ron King of Las Vegas plays his favorite slot machine at the Sahara Thursday, arriving a few minutes after 10 a.m.
The U.S. gaming industry is trying to plan for a post-pandemic era. But it is still operating under the conditions created by the virus. The crisis is not over and gaming states are not out of the woods yet. For example, the casinos in Massachusetts were restricted to 25 percent capacity and a mandated 9:30 p.m. closing time in December. At least in part, those restrictions are the reason revenues fell 40 percent. Not all jurisdictions have reported December. So the complete picture for 2020 cannot be drawn. But one thing we can say for certain: 2020 was the worst year in the history of the legal gaming industry in the United States.
The year probably ranks nearly as low in other industries, too, especially service industries. The crisis impacted every aspect of the economy and the lives of individuals. The year produced dramatic shifts in the societies and economies of the world and every state in the United States. It is highly likely that 2020 will be listed next to the years of the Civil War, World War I, World War II and the Great Depression. No person, business, or government entity remained unaffected by the pandemic. The closing of most, if not all, non-essential businesses and government agencies and the imposition of masks, social distancing, curfews and in some cases near-martial-law conditions produced some profound changes in behaviors and trends. Some trends were the direct result of the pandemic crisis. Others became stronger and more pronounced.
The most visible and significant trend in the broader society is the dramatically increased momentum toward living online. Online shopping, working, and socializing were not invented in 2020; each had been around for years, increasing year over year. Amazon was founded in 1994. Originally, it sold only books. Today, Amazon sells nearly everything and is the world’s largest retailer. It was perfectly positioned for the stay-at-home world of 2020. Working remotely on a computer connected to other employees and corporate culture on the internet has also been growing steadily since the 1990s. The coronavirus crisis made working online more than just an option; it made it essential for many. Probably as much as 25 percent of the workforce was compelled to work online from home at some point during the year.
And while they were working and shopping online, people also began to socialize online; Zoom became a worldwide phenomenon. During the lockdown, people could not go out to eat, workout, or learn to dance. Those things too found an online existence. Gradually, over the course of the year, a stay-at-home culture began to blossom. It even became the preferred option for many. Those societal changes in behavior also impacted casino gaming.
In Nevada, casinos were ordered to close on March 17th and permitted to reopen on June 4th. Casinos in the Silver State, like those in other states, experienced a rush of business when they reopened, the so-called pent-up demand. One person in Vegas called the opening day the greatest day ever. The euphoria did not last. The virus crisis did not go away; in fact, it got worse. As a result, most jurisdictions, including Nevada, began to impose additional restrictions on top of the masking and social distancing required on the initial reopening. Three states ordered their casinos to close a second time. At the end of 2020, most jurisdictions still had restrictions in place. The restrictions have had a drastic impact on casino revenues. For the first 11 months of the year, gaming revenues were down more than 30 percent from 2019. Actually, the decline was in the March-November period. In January and February 2020, gaming revenues nationally were up more than 10 percent. There was one mitigating factor for gaming revenue during the year: the internet.
Just like socializing and shopping, online gambling skyrocketed in states where it was legal. In most states, the online activity was sports betting. In states with online sports betting, as much as 90 percent of the bets are taken online. New Jersey, Pennsylvania, Delaware, and West Virginia have online gambling on other casino games as well. Those games have done very, very well during the pandemic. However, the majority of the gaming industry does not have an online component. Without it, brick-and-mortar casinos are suffering, and not just from the restrictions, but also the changed social attitudes. The stay-at-home culture is making itself felt.
In Massachusetts, the Gaming Commission released a survey this month that it had conducted in December 2020. In the survey, Encore Boston Harbor, MGM Springfield, and Plainridge Park were open and operating under a 25 percent capacity restriction. But the actual usage was below 20 percent, even during the busy Christmas to New Year’s week. During the first weeks of casinos reopening around the country, pent-up demand was the narrative and casinos reported good crowds. But six months later, the narrative had changed, as more people opted to stay home.
The year ended quietly, without the usual celebratory crowds, fireworks, dancing, and kissing. People wanted to return to normal activities, but they had lost the habit. They were tired of being forced to stay home, but they felt more comfortable and safer there. Fear of the virus and mask fatigue has taken over the narrative. People want to go out and socialize, but don’t want to have to wear a mask and stay six feet away and they do not want to catch COVID-19. The gamblers, just like the workers, shoppers, and dancers are staying home waiting for a vaccination and the end of this pandemic nightmare.
