COVID-19 Crushes Louisiana Gaming In 2020, Resulting In Potential Loss Of $100 Million

Posted on January 7, 2021 - Last Updated on January 26, 2022

Louisiana casino revenue numbers, like those in every other state with casinos, took a huge hit in 2020 due to the COVID-19 pandemic.

Also, like in every other state, that means fewer gaming tax dollars for the state treasury in the Pelican State.

One gaming industry spokesperson in Louisiana thinks the loss of tax dollars could reach $100 million. If that’s the case, state officials will have some tough decisions to make in 2021 and beyond.

How much did Louisiana casino revenue fall in 2020?

Exact figures for all of the state’s gaming facilities aren’t available yet. But the news out of the industry isn’t good.

Wade Duty, executive director of the Louisiana Casino Association, estimated the state will receive $100 million less than projected.

While a two-month shutdown imposed by Gov. Jon Bel Edwards played a part, that’s not the whole story. Diamond Jacks in Bossier City never reopened. The rest have dealt with reductions in amenities and gaming positions as the pandemic has continued, meaning fewer opportunities to part customers from their money.

“The non-gaming revenue is really taking a beating just like it is in the rest of the entertainment and dining sectors,” Duty said. For casinos, non-gaming revenue means beverage, food, and ticket sales along with services like valet parking.

Since casinos began reopening in May, they’ve limited capacity on their gaming floors to 50% of fire code and shuttered gaming positions. With the available offerings, they worked their way back up to 75% to 85% of their previous year’s numbers. That may sound good, but it’s an economy of scale.

When you’re dealing with hundreds of millions of dollars, a reduction of 15% to 25% can mean a nine-figure drop in tax revenues. That means possible cutbacks in the state budget ahead.

What effects might the loss of tax revenue have in Louisiana?

Gaming taxes — not just from casinos but also the Louisiana Lottery and video lottery terminals — are one of the biggest sources of revenue for the state. In the fiscal year 2015, for example, it ranked fourth.

That means this drop could affect all state services. Education, senior care, transportation, etc., could all be on the block to some extent. The state has been able to mitigate cuts so far. Although that’s mostly been due to federal aid.

Without any new federal stimulus for states, Louisiana lawmakers may have to face hard choices soon. However, they could help themselves by moving swiftly on another gambling industry segment.

In November, voters in most of the state’s parishes authorized sports betting. The legislature now has the task of drafting regulations ahead of launch.

The faster legislators can complete regulations, the sooner the state can see new revenue from sports betting. History is not kind to that hope, though. It took the same bodies over two years to finalize rules for daily fantasy sports.

Casinos will likely play a part in sports betting, whenever it comes. They would prefer that to be sooner rather than later. As the pandemic continues, online sports betting could aid in their recovery.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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