The Innovation Group (TIG) has been following COVID-19 and its impact on the gaming industry since the pandemic entered the global stage in mid-January. Initially, we tracked domestic and international gaming activity and revenue declines on a market by market basis, until it became clear in mid-March that casinos along with the entire hospitality and leisure industries would essentially shut down. Since then, our focus has been multi-fold: (1) We have stimulated dialogue between tribes, operators, investors, and regulators to discuss how they are addressing business needs during closure and their best practices. (2) We have been looking forward, developing a forecast model for a wide range of potential recovery patterns across gaming markets which can be adapted on a local market basis as new information and data become available. (3) We are tracking customer sentiment so that our Innovation Analytics team can use player perceptions to refine forecasts and inform marketing decisions in the new gaming environment.  Today, we release our analysis of potential recovery patterns for the gaming industry from COVID-19.

Gaming Industry Coronavirus Recovery Analysis
- Summary -
The Innovation Group's Coronavirus Recovery Analysis, A Gaming Industry White Paper is a preliminary analysis of potential recovery patterns of the gaming industry from COVID-19. US Commercial casino revenue for 2019 is utilized as the baseline in the recovery model forecast, and presents regional percentage recovery estimates that apply to commercial and tribal casinos. Destination, international and online gaming markets are considered qualitatively in the report.
The analysis applies a range of demand recovery scenarios based on (1) the level of decline in the economy (measured as employment and income) and in perceived customer security (based primarily on performance immediately preceding closures); (2) ramp up of economic recovery, and; (3) ramp up of consumer acceptance for spending and use of public spaces.
Supply factors include the impact of social distancing and potential changes in the competitive landscape. Constraint sensitivities to reflect the impact of social distancing are based on a continuum of thresholds linked to daily win per unit where win per unit above $500 reflects extreme constraint and win per unit below $150 reflects minimal constraint.
Findings indicate that the rate of revenue recovery by the end of the first year of operation following reopening would be lower than demand potential as long as social distancing measures are in effect. A casino with extremely high utilization pre-virus would reach pre-virus levels of only 33%, while a casino with minimal utilization would reach 73%, or an additional drop of approximately ten percentage points off the demand potential. These estimates are based on closing three of every five gaming positions. If wider spacing is required, the recovery would naturally be lower, or vice versa.
On a national basis, given the mixture of capacity levels, we estimate that results would fall in the Moderate range as shown below.

Percentage recovery estimates are also presented by US Census region, which is depicted in the following map.

Variations among regions result from differences in unemployment claims and virus caseload. The estimates apply equally to commercial and tribal casinos.
To discuss our Gaming Industry Coronavirus Recovery Analysis or other Innovation Group activities and services, or for media inquiries, please contact an Innovation Group partner today:

Michael Soll
The Innovation Group

Thomas Zitt, Ph.D.
Executive Vice President
The Innovation Group
Michael Zhu
SVP, Int'l  Operations Planning & Analysis
The Innovation Group
Brian Wyman, Ph.D.
SVP, Operations & Data Analytics
The Innovation Group


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