Pennsylvania Sees Massive Financial Losses From Casino Closures

• In the three months of mandatory shutdowns from the Coronavirus, Pennsylvania’s 12 casinos lost an estimated half a billion dollars in revenue for the state.
• Research analysts from the Allegheny Institute for Public Policy expect the Keystone State to continue to feel the effects of these losses in the years to come.

PITTSBURGH – Pennsylvania has been hit with an estimated $424.2 million loss in tax revenue from the gambling industry through the closures of casinos from the outbreak of COVID-19.

For almost three months, the state’s land-based casinos were closed, as ordered by the government due to nationwide shutdowns of all gaming establishments. During these same months in 2019, the 12 casinos in the Keystone State saw a combined gross gaming revenue (GGR) total of $968.8 million from slot machines and table games.

Based on those figures, nearly half a billion dollars in revenue was lost in 2020 for Pennsylvania from their gaming market.

Outlook For The Economy In Pennsylvania

The Allegheny Institute for Public Policy studied the gambling industry of Pennsylvania and how it’s been greatly affected by the Coronavirus pandemic.

Their findings suggest a domino effect in regards to funding and budgets over the next few years in order to recoup the huge losses that they’ve sustained. Schools will be one of the areas that will be affected as revenue from casinos has helped in paying school taxes for the state.

Unfortunately, COVID-19’s required closures of casinos happened during the time of year when these establishments are the most lucrative in PA, the study found.

“Statewide casino data over the past few years indicates that the month of January tends to bring in the lowest amount of gross terminal revenues (GTR) during a calendar year while March typically yields the highest. Due to the mandated closing, Pennsylvania’s casinos lost at least two and a half months of revenue, including half of the best revenue month of the year.”

The study went in-depth with its findings and stated that while June has allowed casinos to reopen again, they will still record an estimated loss of $140.3 million in revenue on top of what’s been lost already.

The casinos in the state employ 16,717 people, most of whom were likely furloughed during the lockdowns. Jobs in the gaming industry showed a drop of 70% in April, meaning that only 30% were still going to work while the others sought unemployment benefits of some sort to stay afloat.

Looking Ahead

Now that the casinos have reopened, people can get back to work and businesses can begin rebuilding profit margins. Luckily, online gambling in Pennsylvania is legal and growing.

This has offered some relief in revenue from gambling as the entire industry was not shut down with the pandemic. There was actually a spike in internet gambling when the land-based establishments were closed. Sports betting continued with their internet sportsbook offerings, seeing $2 billion wagered in the past year through online applications.

But in April, there was a 73% surge through internet casino gambling when compared to March. From April 2019, it was up 84% in those accessing the platforms to wager on casino games.

Online casinos made a combined $98.8 million in April and May with Pennsylvanian players. From January through June, internet gaming produced $80 million in revenue for the Keystone State as slots are taxed at 54% and table games have a 16% tax placed upon them.

“Although online gaming revenue from slots, table games, and poker rose to record-setting highs, the total intake from January through June ($206.6 million) doesn’t even cover a quarter of the estimated losses from slot and table games,” wrote Hannah Bowser a research assistant and Frank Gamrat, an Executive Director with the Allegheny Institute.

Losses have occurred across the board for the Pennsylvania gambling industry, even with internet spikes, the state will feel effects of the COVID-19 impact for quite some time.