Pennsylvania Casino Gambling Faces Uphill Battle
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Pennsylvania Casino Gambling Faces Uphill Battle

Revenue from legalized gambling is technically up in Pennsylvania, but the local government worries that there could be some challenges in store for the business on the heels of the coronavirus pandemic.

The coronavirus pandemic has impacted every industry. Even the betting industry, which is largely considered recession-proof, has suffered. States are only now beginning to figure out the aftermath of betting-site closures. For example, Pennsylvania casino gambling faces an uphill battle in the months and years to come on the heels of COVID-19.

To be sure, this concern has not reached fever pitch. Preliminary figures are actually quite encouraging. But Pennsylvania is bracing itself for revenue setbacks as the result of casino closures. More than that, many are left wondering whether there will be any long-term, perhaps irreversible consequences as a direct result of the pandemic.

The State of Casino Gambling in Pennsylvania

Legalized gambling came to Pennsylvania roughly a decade ago, making it one of the earlier places outside Nevada and Atlanta City in the United States to do so. Since then, they have enjoyed record tax revenue virtually every year. That includes 2020 when the COVID-19 outbreak came to light.

But can this trend endure any further?

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Record Gambling Revenue in 2020

Though full 2020 figures haven't yet been finalized, the Pennsylvania Gaming Control Board is expecting a 25 percent increase in gambling revenue from 2019 to 2020, according to GamblingNews.com. The first five months of 2020 brought in $471.4 million of tax revenue, up from $438.1 million in 2019.

That roughly $33 million upticks only represents a sub-8-percent jump, but it doesn't factor in the projected boom in online gambling activity. Pennsylvania can also forecast similar growth in the latter seven months of 2020 year because casinos weren't forced to close down for a second until the very end of the calendar. They had almost a full summer to continue raking in profit as usual.

Furthermore, the revenue estimations also take into account the multiple casino licenses Pennsylvania auctioned off in 2020. Bally's Corp., for instance, purchased one and plans to open a $120 million facility down the line. It will be the 13th casino in the state of Pennsylvania.

Casinos Bracing for a Rough 2021

All the numbers would seem to imply an encouraging future for casinos in the state. They might not.

So much of Pennsylvania's revenue was contingent upon online gambling and those new casino licenses. Overall, though, the money generated from traditional on-site betting—i.e. table games and slots—saw a drastic decrease.

Pennsylvania estimates that the two separate casino closures this past year—the first for nearly three months and the second for nearly another month from mid-December to early January—cost $265 million in potential tax revenue. That, again, isn't so much of an issue when the industry grew overall, but it does speak to potential problems in 2021.

No one quite knows whether casinos will be forced to close down again. The mass production of two separate coronavirus vaccines should be a silver lining, but the United States is well behind the deployment goals that were set.

On top of that, Joe Biden will officially take over the presidential reins as of January 20. Just as he plans to install changes to the minimum wage and the U.S.'s stimulus package plans, he could institute another lockdown that costs states like Pennsylvania nine figures in casino-floor revenue.

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The Future of Casino Gambling in Pennsylvania—and Elsewhere

As if the casino industry wasn't complicated enough, gambling experts are worried about the stigma of densely populated public gatherings for the foreseeable future.

Crowded venues have by and large been deemed taboo since the onset of the pandemic. That view won't suddenly go away overnight. Not everyone is going to get the vaccine, and even if they did, it still takes a while for full immunity to take effect. If the vaccine is successfully mass deployed by the end of 2021, it could be another few months, if not more, before masks are no longer required in public places.

Getting to that point will not only cost casinos a ton of money during the 2021 calendar year, but it's just half the battle. After spending so long in a world ruled by COVID-19, it will take people a while to get back to normal.

This isn't a situation in which one day they are living with extreme caution and then pretending like nothing happened. Everything and everyone and, most notably, every industry will take time to recover. Theme park attendance will increase gradually. Domestic and international travel will slowly become more of a regular occurrence. People will return to bars and clubs in drips and drabs. Ditto for department stores. And malls. And restaurants.

It isn't yet clear how the casino industry will be impacted in a post-COVID world. People will look to places like Las Vegas and New Jersey as harbingers. The quicker they rebound, the better it is for the tertiary casino hotspots in places like Pennsylvania, California, and Oklahoma.

When all's said and done, though, the casino industry could be facing a permanent shift. People have been forced to go about their lives remotely. They might continue to do so, in which case online betting will become the norm. And though online gambling from official casinos generated $130 million in 2020 tax revenue for Pennsylvania, this market is tougher to regulate and capitalize on due to overseas sportsbooks.

States will need to adjust as a result. The casino industry may return to form—or close to it—in a couple of years. In the meantime, they'll have to figure out how to drive customers to domestic online betting sites or risk seeing their tax revenue streams plummet.

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