The ongoing coronavirus pandemic has plunged the world into a global health emergency of as yet unprecedented proportions.
It has sent shockwaves across the globe while sending the economy careening towards what may very well be the steepest economic decline since the Great Depression.
It has canceled major sporting and entertainment events all over the world, shut down businesses, and curtailed livelihoods.
Not surprisingly, COVID-19 has thrown the entire 2020 sporting calendar into disarray, leading professional sports leagues to hastily suspend their seasons to curtail the transmission of the virus. Not even the Tokyo Summer Olympics were spared from the inevitable postponement.
With the deferral of major professional sports leagues, it’s not hard to deduce the impact of COVID-19 on the online gambling industry. After all, bettors can’t bet on the outcomes of sporting events if there aren’t any taking place, to begin with.
And before we discuss further about the consequences that this pandemic has brought upon us, this video will give you quick overview how the gambling and business have been affected during this period:
Now, let’s do a deep dive into the impact of COVID-19 on the online gambling industry and its effect as it stands for its stakeholders, beginning with recognizing the COVID-19 effect on the sports betting industry.
The COVID-19 effect on the sports betting industry
A great majority of sports events and leagues all over the world are in virtual limbo since the Coronavirus outbreak. They have forced major industry stakeholders into hitherto unprecedented changes in the way they do their businesses. This is because the bedrock on which their businesses were built has been tremendously and negatively impacted.
And for the sports events that have been impacted by the Coronavirus outbreak, different actions are taken depending on the decision of their respective orgnizations.
Major professional soccer leagues all over the world have since reopened, albeit behind closed doors. Major League Baseball remains suspended as of this writing. The National Hockey League is discussing finishing out its season behind closed doors in North Dakota. The National Basketball Association, on the other hand, is resuming its season in July behind closed doors at Disneyland, Florida.
And there’s still plenty of uncertainty as the world adjusts to the “new normal,” as bans on social gatherings are still in effect in most parts of the world.
Heavy Fall Out for Land-Based Casinos
It’s not just organized sports too; casinos, bingo halls, sports betting parlors, and other gambling establishments have temporarily been shut down until further notice.
Land-based gambling operators, especially the ones in emerging markets like China and Latin America, but also casinos in Macau or even Monte Carlo Casino, have taken a hit in revenue as COVID-19 continues to affect the traditional gambling markets. The rest of the national markets are expected to experience the same losses as the impact as the situation continues to shake out.
That’s not to say that the North American market (especially the casinos in Las Vegas and New Jersey) has come out unscathed in light of local casino shutdowns. Land-based lotteries in grocery stores have seen a decline in demand as states are expected to shut down shops in certain jurisdictions, including Canada.
Although traditional brick-and-mortar operators are facing as yet unrivaled losses, online gambling operators have experienced a surge in new players, betting activity, and revenues.
However, there is a very real concern that people might stop spending money on gambling as the far-ranging economic effects of lockdowns and quarantines become apparent. This is paired with ongoing concerns about the slow, gradual pace with which land-based gambling operators resume their activities once pandemic-induced restrictions are lifted.
This may manifest in a change of habits for most players who have begun to frequent online casinos and sportsbooks, which represents another Pandora’s box of consequences for the industry in general.
Increasing Revenues for Online Gambling Fueled by the Decline of Sports Betting
While traditional channels and most professional leagues remain in a holding pattern because of COVID-19, European online gambling operators, on the other hand, are experiencing a substantial increase in online casino gambling from their existing clientele. This spike is also attributed to the ease at which traditional shop bettors convert to online channels.
In Italy, for instance, online gambling revenues have increased exponentially in March 2020 as opposed to 2019, which is primarily associated with the impact of COVID-19.
Across-the-board increases in online poker and online casino gambling revenues were recorded, with an increase from €7.2 million to upwards of €16 million for the former, and €72.6 million to over €94 million for the latter as of March 2020.
However, the same cannot be said for the sports betting industry. Perhaps not surprisingly, retail and online sports betting are taking the full brunt of this downturn after all brick-and-mortar betting parlors were shut down, and all sporting activity abruptly postponed during the lockdown. The loss in revenue was to the tune of €35 million when compared to March 2019.
Most countries are expected to follow the same trend. In the Philippines, for instance, online gambling has increased in popularity in the face of severe lockdown restrictions, despite being a gray area when it comes to the country’s antiquated illegal gambling laws. While online gambling is technically unavailable for most Philippines-based customers, players have nonetheless flocked to online poker rooms and live dealer table games over the internet.
However, it’s not all doom and gloom for retail and online sportsbooks – even in these uncertain times, fortune favors those who can adapt.
Finding Opportunity in Troubled Times: How the Online Gambling Industry Is Staying Afloat
That said, sports betting industry stakeholders have taken the same efforts that professional sports leagues have taken in offering a wide array of products and competitions in order to keep fans engaged and somehow recover the losses on revenue.
This is in addition to the continuous action they were able to offer on the professional leagues that were running throughout the global lockdown period (Belarus and Taiwan, for instance).
Sportsbooks have also been forced to diversify their product offering in the midst of this unprecedented economic downturn. These include offering odds on esports such as NBA 2K20, FIFA 20, and eFootball PES 2020 (Pro Evolution Soccer) tournaments, to name a few.
Virtual sports, which are simulated games or simulations based on historical performance and statistics, have since been offered by online sportsbooks as one of the ways to recoup their significant losses from the suspension of most professional leagues.
Another way sports betting companies are adapting to the realities of COVID-19 and its impact on their business is by providing other varieties of wagering activities. Some industry experts have raised eyebrows as certain types of “action” can be seen as troublesome.You will find more infographics at Statista
For instance, one Costa Rica-based sportsbook offered action on betting on maximum temperatures in locations around the country. Interesting action, albeit one that may be construed as it goes beyond betting on a specific outcome.
Financial and securities regulators may interpret such action as entering into a derivatives contract that is outside the jurisdiction of gambling agencies.
Losses related to COVID-19 in the sports betting industry have been precipitous for sportsbooks and casinos. But regardless of questions of legality and everything else, they have been largely able to keep themselves afloat through the lean periods. They were able to do so by adapting to the pandemic situation and finding ways to mitigate the damage it caused – such as expanding into new markets and broadening their ranges to support ongoing leagues.
For online casinos, however, the pandemic has presented an opportunity to increase their revenue, their registration numbers, as well as their traffic.
There is a clear demand for entertainment. And understandably so, since people are forced to stay home – people are always looking for new hobbies and activities for their own leisure. Business is picking up for the online gambling industry, despite the inopportune circumstances in which they arose. That’s not going to change anytime soon – at least not in the near future.
Understanding player behavior is crucial for online operators – because knowing their customers will help companies glean insights on how to make their business agile and flexible enough to adapt to such an abrupt turn in player behavior. Companies that are able and adaptable enough to navigate through these uncertain waters are the ones who will be poised to maximize their gains in the post-pandemic order.
One of the most effective approaches companies can utilize this is to invest in curating, creating, and distributing relevant, useful content to weather the storm. This will set themselves up to recover faster than other companies that are not set up and unaware of how to overcome the corona crisis with content marketing.
There isn’t a better time than now, either – especially given the fact that there are more and more players who are locked down at home and spending the majority of their waking hours on their mobile devices. Opportunity knocks in the post-COVID world – but only for those who choose to adapt and evolve.
The bottom line is, content marketing works.
And, if you’re ready to take your business to the next level or the “new normal”, especially when it comes to the upcoming major sports events in 2021, you’ll want to partner up with an agency that can help you cut through the static with top-notch content.
How did you like May Thawdar Oo’s blog post “The Impact of COVID-19 on the Online Gambling and Sports Betting Industry”? Let us know in the comments if you have anything to add, have another content idea for iGaming blog posts, or just want to say “hello.” 🙂