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COVID-19's impact on the gaming industry

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Brett Abarbanel, UNLV International Gaming Institute's Director of Research, joined Yahoo Finance to discuss how the gaming industry has been impacted by COVID-19 and why people are turing to online gambling and gaming.

Video Transcript

ADAM SHAPIRO: And we want to talk about a new report out called Gaming Companies Place Their Bet. To help us understand what this recent study and survey, which was conducted by the International Gaming Institute out of Las Vegas, as well as KPMG, we invite in Brett Abarbanel, who is the International Gaming Institute director of research. Thank you for being here.

I'm going to get right to the money because everyone likes to say, show me the money. You're saying that in the next 9 to 10 years, we could see online gaming, what I would call gambling, go from, what, $20 billion to more than $30 billion industry. Could it even go bigger than that?

BRETT ABARBANEL: I mean, it certainly could. We're already seeing the trajectory happening here. This is something that's really grown significantly, especially in the United States since the pandemic has hit. There's some complexity here. For a long time in the United States, it largely wasn't legal to bet online. And the legal areas where it was, because this was really, and still is, a states' rights issue, these areas were few and far between.

But between the expansion of legalization, investment in this online experience to make it as good or better than going in person to a casino or a resort where there's gambling, now people are trying these virtual offerings as these in-person experiences are limited or, in some cases, even still unavailable.

SEANA SMITH: Well, Brett, going off that, I mean, it's interesting, as more states have legalized gambling. But there is the regulatory aspect still to all this. I'm curious just how big of a headwind you see this being to the industry's growth, at least in the medium-- I guess, immediate timeframe here.

BRETT ABARBANEL: Great question. Some of this has already been in the works. We're already seeing this growth happening. The next step, for example, will just be this coming Friday, where we'll see it at noon. Online sports betting and other forms of online casino games are going to be launching in Michigan. And it's been going pretty quickly, state by state. Often, gambling is viewed as a way to replenish tax coffers that have been depleted during times of recession or times of pandemics.

And so, this growth has already really started happening. If we look at, for example, in New Jersey, online gambling revenues are up almost 100% year over year, when we start looking at different months. In November, Pennsylvania posted an almost six-fold increase in revenues. And this is after some of those land-based casinos had already re-opened. So, as the momentum continues, it's just going to get greater and greater.

ADAM SHAPIRO: Well, let's go back to the old-fashioned gambling. 2/3 of the people in the survey said they would be comfortable returning to a casino. I personally think they're probably going for the buffets, the all-you-can-eat buffets. But that seems pretty high, or is that low, do you think?

BRETT ABARBANEL: Oh, it's interesting you mention the buffets. I'm not sure if they'll still be there when they come back. I didn't think it was actually that surprising, especially now that we're getting increasing news about different health and safety measures. And this is particularly important. And it used to be the case that when you looked at reasons why somebody might go to a casino, they talk about value, or they talk about the fun they might have gambling or the different amenities that might be available there.

And now, health and safety measures play a role in that as well. Most people will name that as one of the deciding factors when they pick which casino to go to. So, marketing teams now have this extra differentiation that they want to make when they're trying to get people to come in.

And this is really about visibility as well. A lot of folks who talk about feeling more comfortable are saying that because they're seeing these efforts being done. It's not just advertising it, whether that be on the website or via social media or other efforts. We're actually seeing this happen. So, for example, one casino put in 100 new air purifiers, but to make sure they were seen, made them neon colors.

ADAM SHAPIRO: All I know is the all-you-can-eat crab legs are a winner with me. Brett Abarbanel, UNLV International Gaming Institute director of research, thank you for joining us. We'll be right back.