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In May, a few months into the pandemic, the online gaming industry was seeing record highs in terms of overall revenue. As coronavirus cases have risen even higher since then, so have online casinos’ revenues.
New Jersey hit a monthly record of $93.5 million in October revenue from online poker and online casinos, up 106.7% from October 2019. Pennsylvania saw its online casinos and poker rooms generate a record $59.8 million in gross operator revenue for October, a record for the keystone state.
New Jersey and Pennsylvania — along with Nevada — are two states that typically have the most online gaming revenue and are generally good indicators for the industry.
“On a purely business level, it strengthened our business. Our business has really thrived,” Max Bischel, VP of U.S. Business at Gambling.com, told MarketWatch. “We had more people focused on online casinos. The online business grew substantially throughout Q2 and Q3 to a new level.”
Gambling.com connects bettors with online gambling companies.
While no major professional and college sports were being played from March to May, the industry saw a big jump in its total players.
Bischel claims players who might normally bet on sports would play “a couple hands of blackjack or sprint the roulette wheel a few times” during the summer sports hiatus.
But now that sports are back, bettors are not choosing to either bet on sports or play online poker — they are doing both.
“You’re back to pre-pandemic levels with sports, coupled with the increase in online casino activity. It’s hard to think in retrospect what would have happened without a pandemic, but as the situation stands today it’s pretty positive for the industry,” Bischel said.
Many in-person commercial casinos haven’t fared as well.
The U.S. casino industry recently sought relief from the government after states lost more than $2 billion in lost tax revenue in the four months they were shut down due to the pandemic. One of the destination-focused areas that rely heavily on commercial property revenue is the famous Strip in Las Vegas — Strip properties’ gross gaming revenue declined by 30% year over year to $375.8 million, according to the Nevada Gaming Control Board.
But companies that specialize in regional casinos are more equipped to deal with the pandemic. Places like Penn National
PENN,
and Caesars
CZR,
who operate local casinos with high visitor retention rates are more likely to do well.
“Destination-focused casinos are in a little bit of a more difficult position. You take AC (Atlantic City) or Nevada vs more regional-based casinos. I’m talking about places like Chicago or Philly that aren’t major attractions for gaming specifically — those places will continue to thrive,” Bischel said.
And Bischel says the boom in online activity won’t necessarily hurt all retail casinos in the long run.
“I don’t think there’s a correlation between casinos being open and online gaming being less. There’s definitely overlap between the same players. Based on what we have seen in the past when players did have the opportunity to go to a physical casino or play from the comfort of their own home, they are not directly tied to each other. They are separated in most cases.”
The trend toward online poker likely won’t change in the coming months as the weather starts to get colder.
“Cooler weather unquestionably benefits online gaming,” Valerie Cross, an analyst for PlayPennsylvania.com, told MarketWatch in an email. ”And that should be even more pronounced this year because of the pandemic.”
