As sports make a most welcome return, fears that the coronavirus could mark a terminal point for the igaming industry have not materialised. If anything, the online vertical has proved its worth during COVID-19.
It is not difficult to imagine the relief that must have swept through the offices of the world’s online sportsbooks when German referees blew their whistles on 16 May to mark the restart of the Bundesliga, the country’s top football league. Finally, some top-level sporting action is available and online betting operators are able to offer expectant punters some quality sporting content to bet on.
If ever the importance of high-calibre sporting action to the igaming sector needed demonstrating, the coronavirus health crisis has done that and then some—on the business front, of course, where it provides quality weekly content on which bets can be offered year-round.
But even if you’re one of those people who has never seen the point of football/soccer, tennis or Formula 1, sporting events have shown how they also lift the spirits of the population (while keeping people busy of an afternoon).
The German good news was followed by similar announcements from Portugal, England and Italy, where restarts of those countries’ top football leagues have been scheduled for 30 May and 12 and 15 June respectively. Spain also announced its Primera Liga would restart on 8 June. South Korea’s K-League started up again on 8 May and according to H2 Gambling Capital, this “led to sports data provider Sportradar distributing live feeds of the matches to an unprecedented 37 countries”.
The uplift across the B2B sector has been noted. David Bonnefous, head of sales for Sportnco, which runs the largest online betting network in Spain, told CDC Gaming: “Stakes on German football represented up to 15% of all wagers placed on our Spain-licensed operators’ sites during the 16 May weekend, rising to 22% this on the weekend of 23 May. The rest was made up of bets on South Korean and Byelorussian football and friendly matches.”
Of the major European football leagues, only France decided to terminate its Ligue 1 football season with immediate effect. The decision has been criticised as too hasty by some of the clubs, though the French authorities’ actions might also partly be explained by the fact that PSG’s behind-closed-doors Champions League victory over Dortmund on 11 March saw thousands of supporters of the country’s biggest club congregate just outside the stadium to celebrate.
Importance of igaming
There were fears that the pandemic could mark a terminal point for the online industry when COVID-19 spread throughout Europe and the U.S. in March and April. The economic impact on land-based betting shops and casinos of sports leagues and major events being cancelled is obvious.
For the online vertical, sportsbooks have been starved of content and volume for two months or more. Some have managed to direct play toward their casino portals, but many have taken heavy losses.
From a regulatory and public-image perspective, not being able to offer sports betting also means one of the softer and more socially accepted gambling products has not been available. For most jurisdictions, this has meant attentions have turned to online casino, slots in particular (and virtual sports to a lesser extent).
Anti-gambling opponents were quick to claim that this focus on slots and casino products would lead to a boom in online casinos, higher rates of problem gambling and operators not adhering to responsible-gambling commitments.
Critics will further round on the industry as news that PTES, a now-defunct brand that was part of igaming conglomerate Playtech, had been strongly reprimanded by the UK Gambling Commission following the suicide of one of its customers in 2016. The Commission said that if PTES was still operating under its UK license, it would be fined £3.5m and action would be taken against key individuals involved at the time.
Despite this, and it is important to be cautious and not minimise the seriousness of that case, so far data from the UK and Denmark covering the lockdown period suggests players have not turned to online casino in huge numbers. The hope is that operators have behaved appropriately and will continue to do so after the crisis has passed (not discounting some ill-judged advertising by some UK brands).
U.S. igaming growth
In the U.S., the importance of regulated igaming could not be clearer. With Pennsylvania’s land-based venues closed, regulated igaming operators accounted for 93.5% of all gambling revenue in April. H2 said igaming saw “a greater increase in activity in April relative to our pre-COVID-19 (forecasts) than in any other market to release data thus far”.
The state’s total gambling revenues came in at $46m for April. This represented a 65% drop in March revenues, but online gaming accounted for $43m of that total and represented a 77.5% increase on March’s igaming revenue of $24.3m.
The breakdown showed online casino revenues up 153% at $37.8m, with poker up 171% at $5.3m. This strong online momentum is likely to continue and even when most venues reopen, the impact of social-distancing restrictions and consumer fear are likely to lead to more people playing at home. Land-based operators are also well aware that the context for playing at their physical tables may have been fundamentally changed, as shown by this tweet from Fox Sports’ Andy Slater.
Poker room at Seminole Hard Rock Tampa reopened 2 hours ago.
Current waiting list: 106 players
They have 18 tables in action right now pic.twitter.com/KsUx7tzgIl
— Andy Slater (@AndySlater) May 22, 2020
New Jersey and Delaware, two of the four U.S. states that have regulated igaming, also announced significant increases in their numbers. New Jersey operators recorded revenues of almost $80m during April, online casino making up $74.8m of that total and poker $5.1m. This represented a rise of 23.4% from $64.8m in March and more than double the $36.6m recorded by the state in April 2019.
The Delaware Lottery’s igaming figures for April showed net revenues were up 66% to $856K over the month of March ($515K) and more than triple the amount from April 2019 ($263K). Overall, Delaware’s igaming handle in April was $28.4m — by far the state’s biggest month. This compared with $16.3m in March and $9.8m in February.
Of course, total gambling revenues (land-based and online) for April were significantly down in those states, but the online segment has provided revenues that are just not there, or are going to offshore operators, for states that haven’t regulated their igaming sectors. This kind of rationale is replicated across many other markets.
B2B contacts have also confirmed renewed interest across both EU and U.S. markets from brick-and-mortar casino operators keen to diversify and mitigate against future challenges. All believed this trend was bound to grow and may result in unblocking regulatory bottlenecks in some jurisdictions.
