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Despite having to navigate its way through the ongoing coronavirus pandemic, the U.S. gaming industry was able to top $50bn in revenue last year for the first time ever, according to the American Gaming Association (AGA).
Bill Miller, president and CEO of the AGA, admitted Tuesday (February 15) that the industry’s recovery was not complete yet, “but it’s worth celebrating the progress we’ve made.”
“We are still waiting for business and international travel to regain momentum and meetings and conventions to return but I’m really optimistic about where we are heading,” Miller said. “And that optimism is rooted in our industry’s remarkable recovery.”
Between slot machines, table games, sports betting and internet gaming, gross gaming revenue (GGR) in 2021 was $53bn. The total shatters 2019’s previous industry record of $43.65bn.
Traditional brick-and-mortar casinos led the industry’s recovery, with slot and table gaming revenue totaling $44.94bn last year, a 6.6 percent increase over 2019. Sports betting’s growth continued to accelerate last year, generating $57.22bn in handle and $4.29bn in revenue, the AGA said.
David Forman, senior director of research at the AGA, attributed the high demand for sports betting last year to strong performances in established markets such as Nevada, Pennsylvania and New Jersey, with seven new markets, including Arizona and Virginia, also boosting handle and revenue.
Two new internet gaming markets, Connecticut and Michigan, also went live last year, helping that segment to a record $3.71bn in revenue.
Miller told attendees of the AGA’s State of the Industry webinar on Tuesday that tribal leaders have expressed to him that 2021 was also the best year on record for the Indian gaming market. Tribal gaming revenue figures for fiscal year 2021 will not be released by the National Indian Gaming Commission for several months.
There are also reasons to be concerned about the industry's future, however.
Miller cited the continued presence of illegal offshore sportsbook operators that offer no consumer protections, do not pay taxes and are not regulated.
Miller stressed the industry was committed to responsibility when it comes to sports betting but getting it right was also about moving players from the “offshore, predatory markets and into the protections of the safe and legal market.”
“Just look at New York and Louisiana, does anybody reasonably think that millions of people just decided to try out sports betting for the first time last month? Of course not. Americans have been betting on sports for as long as there have been sports to bet on.”
He also warned that unregulated and illegal gambling machines are one of the “biggest threats to our industry today.”
Miller said grey-market machines are a major issue in his discussions with state lawmakers but there seems to be “too much pointing the finger at other people.”
“It appears there is a lack of will and that is something that we need to address because at the end of the day these illegal machines are unsafe, they are predatory and they are taking away and destroying the legal marketplace in states in which they operate.”
Lawmakers in Missouri, Kentucky and Pennsylvania have struggled to approve legislation that would ban the machines as some lawmakers support regulating and taxing the so-called skill-based machines that have appeared in convenience stores, gas stations, bars and taverns.
Virginia’s ban on grey-market games has been temporarily set aside by a Greenville Circuit Court judge who will hold a trial on the issue in May.
The Virginia General Assembly voted in 2020 to ban the machines from July 2020 until Governor Ralph Northam, a Democrat, insisted upon a 12-month reprieve to raise money through monthly fees for a coronavirus relief fund. The lawsuit seeks to overturn the ban.
Miller said unregulated machines can initially appear harmless as someone says they have a struggling tavern and if they put two little machines inside they might make a little bit of money.
“And then what happens and is happening is politicians are looking at this and saying you know that local tavern owner is my friend, do I really want to take this money maker out of his tavern or out of this convenience store or out of this gas station?
“That becomes a more politically difficult decision for those legislators to make and so what we really need is law enforcement to step up and do the job that likely politicians are going to be increasingly unlikely to do,” Miller told reporters during a news conference following his webinar.
Miller admitted it was a tough issue, but said the AGA will continue to “push on this because it is like termites eating the floor out of your house and we are the house.”
“The house is what is creating safe environments for people to enjoy themselves. It is creating good and important jobs … and its creating important and huge tax revenues.”
Miller said the problem is not going to be solved by itself, so politicians have to do something that is not easy, which is to ensure the regulated gaming industry is note eroded because of grey-market machines.
“States need to strengthen laws and close loopholes in regulations that permit unnecessary consumer risk,” he said. “And businesses should actively remove these unregulated machines from their properties. It is long past time that we put an end to this.”
