How the Global Lockdown Impact Online Bookies Around the World

On March 11th, 2020, the World Health Organization declared COVID-19 a global pandemic. Governments around the world declared war on the virus, implementing lockdown systems in countries across the world.

The lockdowns ground the global economy to a halt, with millions left unemployed. All non-essential businesses, including betting shops, experienced a forced closure as people complied with stay-at-home orders.

With the pandemic in full swing, and people forced to stay home, consumer behavior saw a radical shift in almost every industry. With bookmakers non-longer able to do business in physical betting shops, the action moved online.

In the six months to June 2020, the parent holding company of the Ladbrokes Coral Group issued a report on the current state of gaming in the UK. The report shows a 50% decrease in revenues from UK net gaming revenue (NGR) in retail establishments.

While most punters found the transition online rather easy to make, sports were another issue. Tokyo ended up caving to the pressure of the pandemic, calling the games until 2021. The English Premier League season came to an abrupt halt, with Liverpool poised to take their first title since the 80s.

All sports leagues around the world followed suit, bringing sports betting to a halt. The only sports league still hosting events was the UFC.

Compounding the misery of low revenues from the pandemic, April saw the introduction of legislation banning credit cards for use in betting and gambling.

With the pandemic easing in Q1 2021, the world expects things to start getting back to normal in H2. However, the effect on the gaming and betting industry is already on the cards.

According to IBISWorld data, reports show the Gambling and Betting Activities industry revenue to decline by around 27% to an estimated £11.1 billion.

Adapting to a Shifting Environment

The pandemic forced the closure of brick-and-mortar gaming venues in popular hubs like Las Vegas and Macau. However, it didn’t take punters and operators long to shift everything online.

The adaptation to the changing landscape happened quickly, and many operators benefited from the transition.

With horse racing and football accounting for 75% of all sports betting in the UK, many gamblers and betting shops moved to cover e-sports.

E-sports saw a massive lift in 2020, with e-sports betting products becoming more accessible in app stores and betting websites.

According to research from the Gaming Commission, gross gaming yields for e-sports increased by a staggering 2,992% to more than £1.5 million in revenue for the year through March 2020.

The industry continued to add another 124% on top of that performance in April, and a further 36% in May, with total revenues of £4.2 million. While traditional sports remained in limbo, with professional footballers catching the virus, e-sports capitalized.

One of the most successful examples was how the Formula One season stopped and transitioned online to a virtual championship.

While everyone stayed home, some people decided to try gambling for the first time. Many more said they tried using one or more games during the first lockdown, with popular categories being slots and other games offering instant gratification and outcomes. US players trying to circumvent the law searched for betting sites that don’t check age a lot more during the pandemic.

The Light at the End of the Lockdown

With Boris Johnson and Joe Biden insisting Lockdown measures will ease towards April, the gaming industry waits to see how the public will respond to more freedom of movement in their lives.

However, experts believe the changes are here to stay, and they don’t think the brick-and-mortar industry will make a recovery.

Instead, we can expect to further adapt to online gaming and continued growth in the online sector.

The retail sector of gaming is over for the next few years, at least until 2023. With the future remaining uncertain, there’s no way to tell if countries won’t initiate new lockdowns later in H2 2021.

According to the GC’s data, revenues from remote gaming increased 115% from May to June 2020. The result is higher revenue for June than pre-lockdown averages.

The Return of Sports Betting

After the first lockdown, sports returned to screens around the world, with the Premier League, NBA, and NFL getting activities underway.

According to GC’s data, total bets on live sporting events increased 146% in June to £255.4 million. That’s an improvement from the all-time low of £61 million in April 220.

One of the problems with the recovery of sports betting is the lack of crowds in stadiums. In horse racing, there’s a substantial amount of betting done at the venue, which remains closed to the public.

However, the government decided to put pilot events in place, with social distancing in August, with a possible return by the public in October. All of this was moving along until the second wave’s emergence in November, scaling back social integration into betting venues.

The 2020-21 Premier League season kicked off on September 12th, 2020, with defending champions Liverpool firm favorites to do it again. Therefore, we expect national gaming revenues to start climbing again in the UK. At the moment, there are no plans to stop sports leagues from competing in their regular seasons through 2021.

Therefore, forecasts from IBISWorld expect 2021-22 to show a strong recovery in the betting and gaming industry. According to the data, experts believe revenues will increase by 23.9% in 2021.

Key Issues Facing Online Sports Betting in 2021

It’s not all good news with the industry seeing the light at the end of the pandemic tunnel. The shift to online betting made changes in physical establishments, with betting shops having to set maximum limits of £2 on fixed-odds.

As a result of the changes, many bookies decided to close their doors. Driving home the point, William Hill, the second largest industry player, announced the closure of 119 of its physical betting stores. At the same time, the company announced its plans to merge with other online gaming companies.

It’s clear that the gaming industry is transitioning online, and those betting shops that don’t make a move into the virtual environment face extinction in coming years.