A New Era for Gambling: Pandemic's Impact on US Gambling Industry
Impact of COVID-19 Pandemic on the Gambling Sector After Five Years
The COVID-19 pandemic left an indelible mark on the world, and the US gambling industry was no exception. Initially, many believed that the pandemic would be short-lived, lasting just a few weeks, only to find out that it altered the industry landscape forever.
The Great Shutdown
From March 2020 onwards, countries around the world took different approaches to the pandemic. Some, like Sweden, opted for a more flexible policy, while others, like the UK, enforced strict lockdowns. In the US, commercial land-based gambling establishments experienced an abrupt shutdown, with popular hubs such as Las Vegas and Atlantic City closing their doors for 78 days and three months, respectively.
The pandemic created a void for many desperate for entertainment. As professional sports were put on hold for several months, people began wagering on the most unconventional events — from drone racing to table tennis. Online gambling operators thrived during this period, providing a lifeline for land-based casino companies in states like New Jersey that had mobile platforms to tether to for licensing purposes.
Return to Normalcy... sorts
As the grip of the pandemic on the US began to ease, the gaming sector began a cautious return to normalcy. Some states loosened restrictions and allowed gaming properties to reopen, though usually at a significantly reduced capacity. For instance, Las Vegas initially allowed gaming floors to operate at 25% capacity under strict sanitation and social distancing protocols.
It took over a year for casinos in Nevada and New Jersey to fully recover, with mandatory mask-wearing continuing for some time. Major casino companies like MGM Resorts mandated COVID-19 vaccinations for all staff, which created additional challenges as travel remained problematic, particularly for destinations that relied heavily on overseas visitors.
The Transitional Period
With people cooped up for so long, there was a pent-up demand for travel once restrictions began to lift. Visitor numbers to major gambling destinations swiftly increased, and businesses started to return to pre-pandemic levels.
Share prices of land-based casino companies gradually rebounded, with fears that people would shift exclusively to online gambling platforms proving unfounded. Commercial gaming revenue in the US hit record highs for the past four years, reaching almost $72 billion in 2024, according to the American Gaming Association (AGA). The percentage of this total made up by online operations increased to 30% in 2023 and is expected to grow even further as more states expand their online gambling laws.
Winners and Losers
The pandemic unequivocally benefited online gambling platforms, which saw a surge in usage as people gambled from the comfort of their homes during lockdowns. Land-based companies like MGM Resorts and Caesars Entertainment began strengthening their online presence, with Caesars making a significant move by purchasing William Hill in April 2021 for £2.9 billion ($3.7 billion) to bolster its online portfolio.
Sports betting legalization in certain states accelerated during the pandemic, with New York, for instance, finally embracing the activity in the governor's 2022 state budget. The annual tax revenue the state generated from sports betting surpassed $1 billion in 2024, and the revenue potential was a key driver for the licensing of three New York City casinos at a cost of $500 million each.
However, regional casino operators were among the hardest hit by the pandemic, as they often lacked online platforms to fall back on. People also turned to tribal casinos during this time, many of which remained open due to sovereign nations being exempt from state government restrictions. While tribal casinos have fared relatively well, regional casinos have yet to see the same level of growth as their peers. Even popular gambling destinations like Las Vegas and Atlantic City have yet to regain pre-pandemic visitor levels.
Moving Forward
As the gambling industry continues to evolve, the pandemic's impact is indisputable. It accelerated the adoption of online gambling in the US, forcing traditionally conservative states to expand gambling laws in a bid to boost tax revenues.
Although the sector faced challenges, the industry has emerged stronger on the other side. With advancements in technology and a growing push for gambling expansion across the country, the industry will continue to change and offer both challenges and opportunities in the years to come.
- Despite the initial belief that the pandemic would be short-lived, the COVID-19 pandemic altered the US gambling industry landscape forever, with commercial land-based gambling establishments experiencing an abrupt shutdown in March 2020.
- As people were desperate for entertainment during the pandemic, many turned to online gambling platforms, providing a lifeline for land-based casino companies in states like New Jersey that had mobile platforms for licensing purposes.
- Major casino companies like MGM Resorts and Caesars Entertainment, recognizing the surge in online gambling during the pandemic, began strengthening their online presence, with Caesars making a significant move by purchasing William Hill in April 2021.
- Despite the growth in online gambling, regional casinos were among the hardest hit by the pandemic, as they often lacked online platforms to fall back on and have yet to see the same level of growth as their peers.
