An almost three-month closure of casinos in California has led to multi-million-dollar tax losses for the government. According to an estimate, the state has lost $424 million because the gaming properties remained closed because of the pandemic.

State government lose revenue

The decision to lockdown businesses, including gaming properties, in the state because of the coronavirus pandemic has cost the government dearly. Brick-and-mortar casinos with table games and slot machines lost as much as $1 billion in Gross Gaming Revenue (GGR) as business remained closed.

The 12-commercial land-based casinos in the state brought about $968.8 million in GGR in 2019. If the casinos experienced flat growth in 2020, then the state could have brought in roughly $424.2 million in taxes. Casinos share 16% of their table game money and 54% of the slot machine wins with the state.

The impact of this revenue loss on taxpayers is yet to be ascertained. However, it is clear that entities and programs that typically receive funding via casino revenues, like the school districts for property tax relief, will be seeing decreased funding for the upcoming fiscal years. According to the Allegheny Institute for Public Policy, these programs will be feeling the pressure of the lost revenue.

Online casinos save the day

Pennsylvania is one of the only four states in the US that have online casinos. The other three states are West Virginia, New Jersey, and Delaware. Nevada allows online poker but hasn’t legalized online table games and interactive slots yet. Online casinos experienced a surge in activity within a month of brick-and-mortar casino shutdowns.

The GGR from internet operations in the month of April went up by 73% on a month-on-month basis and by 84% on a year-on-year basis. Internet casinos won $43 million in the month of April, followed by $55.8 million in May. This was a 79% rise in wins on a year-on-year basis. Interestingly, internet gaming was launched in the state in July 2019. The state taxes online tables at 16% and slots at 54%. In the first half of the year, the games brought in $80 million in taxes.