Pennsylvania Casinos Lose $315M Due to COVID-19 Closures
Casinos in Pennsylvania were closed for almost three months this year due to the outbreak of COVID-19. Some were closed longer than others as precautions were taken along with new safety and health measures put in place to protect employees and guests. Most of the 17,000 employees of casinos were furloughed as the closures took place. Now, that casinos are back in business, we are seeing just how much revenue was lost. The Pennsylvania Gaming Control Board recently released reports that show a loss of $315 million in taxes.
It is hard to know the exact dollar amount of lost revenues since the casinos could have generated more or less than they did in March, April and May 2019. However, when looking at the numbers from last year, the difference is $315 million in taxes. This is a huge cut and shows how severely the state has been impacted by the closures.
Breaking down the numbers month by month provides a better indication of the revenue totals. In March, the casinos in Pennsylvania brought in just over $120 million. For 2020, that amount came in at $62.1 million as the venues started to close halfway in the month.
For April, in 2019, the state earned just over $118.5 million. In 2020, that number was drastically lower at $18.3 million. May earned $121.8 million last year and $25.7 million in 2020. In June, $119.3 million was generated in 2019 and $59 million in 2020.
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The state taxes slots at a high rate of 54%. Table games are much lower, at 16%. For each dollar in revenue produced from slots, 54 cents goes to the state. The impact of the loss will be felt across the state and not just in regions where casinos are located.
The Nation Affected
Along with Pennsylvania feeling the pinch from lost revenues, so does other states in the US. By March 19 2020, almost all of the 465 commercial casinos in the nation as well as the majority of the tribal venues, were closed. This means losses across the board for the gambling industry as a whole.
The American Gaming Association is reporting that since 2020 started off in record setting form, it will be a strong enough foundation that recovery can be seen during the second quarter. The Commercial Gaming Revenue Tracker of the AGA shows that commercial gaming revenue in Q2 reached $2.30 billion.
This was a drop of just over 80% when compared to last year. CEO and president of the AGA, Bill Miller, said that COVID-19 has created the most difficult economic challenge the gaming industry has faced to date and the record popularity before the virus for gaming and the resilience of the industry during such adversity is evidence that the foundation of the industry is prepared for continued to success as it emerges from the pandemic.
The industry as a whole is hoping that the virus will continue to slow and not surge during the fall. If casinos can start to gain ground and open up capacity levels, then states like Pennsylvania will be able to see large revenues once again.
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