Online Gambling Quarterly: Survey reveals impact of Covid-19 on the online gambling industry

The analysts at the Online Gambling Quarterly asked industry experts to give their assessments regarding the effects of the current Covid-19 crisis on the online gambling industry. The results of the survey show the likely drop in revenues but also highlights the light at the end of the tunnel and even discusses some potential positive effects on online gambling.

When the team of the Online Gambling Quarterly started the survey mid-March, the coronavirus crisis in Europe had just kicked off: only a few gambling shows were postponed, and football was still being played in many stadia. Since the first days of the survey, the world and the perception of the crisis have changed quite a bit. Now all sports events are suspended, casinos and betting shops are closed, and the impact on the online gambling industry is becoming more and more clear.

Negative impact on total revenues (casino, betting, …)

One of the key questions is whether Covid-19 will have an impact on overall revenues (casino, betting, etc.) of online gambling businesses. While the betting business will likely see a significant drop, other verticals such as casino might even profit from the quarantine and the closing of casinos and gambling halls. So what will be the overall net effect?

As many as 65% of the industry insiders surveyed believe that the total revenues will decrease (see graphic below). But 15% see no relevant changes, and 20% of the experts even expect an increase in revenues. Most of the latter likely focus on casino and poker verticals. The perception of the impacts depends very much on the date when the participants took the survey. As we have experienced rapid changes in the past 14 days, and most of them were slightly negative, the perception of the impact on overall revenues changed as well.

Betting revenues will be hit the hardest

Once most sports events – such as the European football leagues, NBA, etc. – were suspended, it became apparent that Covid-19 will have a significant effect on betting revenues in the months to come.

As many as 96% of experts expect a considerable decrease in betting revenues (see graphic below), whereas only 4% of the experts surveyed believe that Covid-19 will cause no relevant change to betting revenues, a view that can only be valid if one focuses on the football league in Belorussia (still running) or esports. Although the experts seem to be divided on how severe the monthly impact will be, most (38% of all market insiders) expect the revenue hit to be more than 50%.

Some leagues are currently discussing the option of continuing the season games in several weeks without spectators (behind closed doors). The experts believe it more “likely” than “unlikely” that this hope will become a reality soon.

Hardly any sports events/bets offered currently

The analysts of the Online Gambling Quarterly analysed the betting offers (bets/markets) of the key operators before Covid-19 hit the sports world and they repeated this analysis in the last week of March – what a difference a few weeks can make:

• Number of bets/markets down by -93%: The average number of football bets/markets offered (all leagues/mostly pre-game) dropped by -93%. Unibet, for example, now offers only about 2,000 to 4,000 bets on football games in Sweden, Burundi, or Belorussia. But before Covid-19 the number of bets ranged from 50,000 to 100,000. Same also applies to other sports such as tennis.
• Number of esports bets up 61%: In contrast to football, the number of bets on esports increased in average by 61%, led by bet365 with approximately 3,000 bets offered.

The light at the end of the tunnel

Every crisis also brings opportunities for growing market share, improving efficiency, etc., so as to out-rival the competition at the end of the crisis. Just days after the industry took the first hits from Covid-19, many experts already pointed out potential winners from the crisis, such as online casinos, virtual sports, esports, and so on (see graphic below).

• Long-lasting migration from offline to online gambling: The discussions run high that Amazon and others, with the help of Covid-19, will take over offline retailers completely. The experts surveyed believe that the same might happen to the gambling industry. As casinos, gambling halls, betting shops and lottery retailers are closed, gamblers will move online – and they might stay there.
• Virtual sports betting will likely increase: Although some insiders point out that virtual is “only” another slot game rather than betting, the experts see it as likely that virtual can profit from this crisis. Also esports is seen to profit from the crisis but to a lesser extent.
• Improvement of cost-efficiency: Already in the past few years, the focus on cost-efficiency has increased, and as a result, the industry saw a wave of mergers. Covid-19 will surely push these efforts even further.

For more information visit the Online Gambling Quarterly via www.quarterly.og-q.com