Shapes of Things

The most recent ‘State of the States’ report issued by the American Gaming Association reveals a rapidly changing gaming industry with more gaming tax revenue, new consumer trends, plunging demographics and an increased emphasis on sports betting and iGaming.

Shapes of Things

Every year, the American Gaming Association (AGA) publishes the State of the States report, which provides a comprehensive financial and regulatory analysis of every U.S. commercial gaming market from the past calendar year. Covering 2021, this year’s report provides a final retrospective on the most remarkable year in gaming’s history. After COVID-19 drove the industry to its worst year on record, 2021 saw gaming revenue dramatically rebound to an all-time high.

Here are the top insights from this year’s report.

Driving Record Tax Revenue

The commercial gaming industry’s record $53.03 billion in revenue in 2021 generated a record $11.69 billion in tax revenue for state and local governments. This money is critical to communities, funding infrastructure, public education, healthcare, emergency services and more. Along with the billions more the industry generates in income, sales and other taxes, these all-time high contributions provide even more evidence that when gaming thrives so do the communities in which we operate.

Reshuffling of America’s Top Gaming Markets

While 2020 saw a significant rearrangement of the country’s top gaming markets due to COVID-19, 2021 saw the market hierarchy largely return to the pre-pandemic order. New York City made one of the most significant realignments—moving from the number eight spot in 2020 back to its pre-pandemic ranking as the country’s sixth-largest gaming market by revenue. Reduced operating restrictions for Chicagoland casinos helped the market regain its status as the third-largest U.S. gaming market, returning the Baltimore-Washington D.C. region to the number four spot in the process. Las Vegas remains the undisputed gaming capital of America, nearly tripling gaming revenue from Atlantic City, the second-largest U.S. gaming market.

Changing Consumer Trends

While the rapid pace of state sports betting rollouts continued to be a focus of industry watchers in 2021, in-person casino gaming remained the bedrock of the commercial gaming industry. Casino slot and table games generated record revenue of $44.94 billion, up 6.6 percent of 2019, despite many casinos being impacted by lingering pandemic shutdowns and operating restrictions in the first part of the year.

Though life began to return to some sense of normalcy in 2021, COVID-19 prevented consumers from returning to casinos in pre-pandemic numbers, with annual casino visits down about 20 percent from 2019 in the five regional markets that report such data (IA, IL, LA, MO, MS). However, this trend was more than offset by strong pent-up demand for in-person entertainment by those who did visit casinos, causing average spend per casino admission to jump 34 percent compared to 2019.

Meanwhile, the average age of casino customer continues to drop. In 2021, the mean age of a casino patron was 43.6 years old, compared to 49.6 in 2019. The pandemic has certainly accelerated this change, and its staying power will be closely watched in coming years.

Accelerating Sports Betting and iGaming

While land-based casino performance drove overall gaming revenue in 2021, the expanding sports betting and iGaming verticals continue to play a larger factor in the industry’s fortunes. Seven new sports betting markets launched in 2021, along with two new iGaming markets. Together, the two verticals combined for $8.04 billion in revenue for the year, up 158.0 percent from 2020 and accounting for a record 15.1 percent of annual commercial gaming revenue.

 

Cumulatively, these findings point to an industry that is healthier than ever, with record-setting momentum from consumer demand, a player base that is currently getting younger and spending more, and growing diversity in entertainment offerings. As 2022 presents its own macroeconomic challenges in the form of rising consumer prices and supply chain issues, these trends can certainly buoy the industry. In fact, we’re already seeing their impacts this year, as the commercial gaming industry is on pace to surpass its record year in 2021, with more than $19.3 billion generated in gaming revenue through April.

Whether 2022 sets revenue records or not, we can all be confident in the industry’s long-term foundation for growth.

Keep up on the industry’s financial performance on a monthly and quarterly basis throughout the year via the AGA’s Commercial Gaming Revenue Tracker.

Articles by Author: Anton Severin

Anton Severin is director of research for the American Gaming Association