US casino closures could cost economy $43.5bn

The AGA has said that the closure of casinos across the US amid the coronavirus pandemic could have a serious impact on the US economy.

In a statement made last week, the American Gaming Association (AGA) said that the shutdown of casinos across the US could cost the US economy over $43.5bn over the next two months.

What was covered in the statement?

According to the statement, 95% of all commercial casinos in the US closed last week, due to health concerns over the threat posed by the coronavirus pandemic. Tribal casinos have also temporarily closed, with the AGA reporting that 76% of tribal venues in the states have closed their doors in accordance with state government orders.

The AGA also highlighted that the mass closure of casinos puts approximately $74bn in annual wages at risk as 98% of the entire gambling workforce, roughly 616,000 casino and resort employees, have been impacted the closures.

In its statement, the AGA also explained that the impact goes further than those who are directly employed by the casinos that have been closed.  In the US, commercial and tribal gambling operations account for about $41bn in revenue, which is used to support public services such as local hospitals and emergency services.

The AGA said: “We support swift government action to protect the health and safety of American communities. But equally urgent action is needed to mitigate the dire impact these closures will have on hundreds of thousands of US casino employees and the businesses that employ them.

“Government action is essential to ensure casino and resort staff and businesses weather the current storm and come through it as the reliable economic driver, job creator, and community partner they are in cities and states across our nation.”

The figures

In the weeks leading up to the closure of hospitality and leisure businesses in the US, there has been a steep decline in hotel occupancy and nearly a third of US travellers have put their travel plans on hold.

The AGA also explained that 40% of group meetings and events have been cancelled for the next 90-120 days and a further 20% of events have postponed until after July. Restaurants have also seen a 56% year-on-year drop in the number of seated diners, and that was before the mass closure of hospitality businesses.

The AGA stated that this will have a significant impact on the US casino industry and gambling sector.

“The impact to gaming businesses goes beyond the casino floor,” said the AGA. “It creates deep uncertainty impacting nearly two million Americans whose jobs are supported by gaming and disproportionately affects the operations of the entire hospitality industry.”

Casino closures in the US

The coronavirus pandemic has had far-reaching implications for several areas of the gambling industry.

Several state governments have made the decision to close all non-essential hospitality and entertainment businesses to help stem the spread of the virus. Earlier this month, Pennsylvania was the first state to close casinos due to the spread of coronavirus. Since then, several other states including Nevada and New Jersey announced the closure of their casinos.

Sports betting businesses have also been hit hard after several sporting groups across the globe announced plans to postpone events due to health concerns. Companies such as Flutter, William Hill, GVC and The Stars Group predict to make losses as sporting events are put on hold.

In the US, the NBA, NHL, MLB, MLS, decided to postpone sporting events indefinitely after a player for the NBA’s Utah Jazz tested positive for coronavirus. The NCAA has also put March Madness on hold.

In the UK, the Jockey Club announced that the 2020 Randox Health Grand National Festival will not take place this year. The English Premier League (EPL), FA, EFL and WSL have also agreed to postpone all professional matches in England. Greyhound racing events will continue behind closed doors without an audience.

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