The Effects of COVID-19 on the Global Gambling Market and Future Predictions
||Published: 19th November 2020 14:30
The corona virus pandemic has greatly impacted the global economy on a grand scale, bringing many industries to a standstill. One of the industries that has seen a turbulent change is the gambling industry. While some facets of the iGaming sector, such as online casinos have seen an increase in demand because of the lockdown in the beginning of the year, others like sportsbooks have not been so lucky. With the cancellations of multiple sporting events and championships, bookmakers and the sports industry in general have taken a severe blow, that couldn’t have been foreseen.
While the effects of COVID-19 are still unfolding, many are left wondering of the long-term impact it would have on the gambling industry in general.
Gambling Shows No Signs Of Slowing Down
Estimates show that by the end of 2020 the global gambling market will be worth US$ 66.7 billion, compared with the previous year’s US$ 58.9 billion. This might not seem as too drastic of a change, but further calculations show that growth will reach US$ 92.9 billion by the year 2023. By 2027, it’s expected to reach US$ 127.3 billion, registering a CAGR of 11.5% from 2020 to 2027.
Research on the effects of the lockdown on UK gamblers shows that around 3 in 10 (31%) say they have tried one or more gambling activities for the first time during lockdown. This figure rises to almost half (48%) when concerning engaged gamblers, with this group being most likely to try online bingo (13%), betting on virtual races or sports (12%), National Lottery online instant wins (11%) and online slots (11%). In addition to this, 41% of active gamblers had opened a new online account since the outbreak of the pandemic.
Along with an increase in the number of players, there has also been a significant boost in the average amount of deposits per player before and after the pandemic from US$ 95 to US$ 110 respectively. This has also affected their weekly net revenue. From US$ 34 before the lockdown and US$ 42 after (per player).
Sports Betting Took A Hit
According to a report across 10 different leading European companies, each with several brands and products, the number of sports bettors dropped by an average of 30%. Research, however, shows that most sports bettors have pivoted to online casinos. First-time Poker players have increased by a whopping 255% compared to an average day before the lockdown. 75% of these new-to-poker players had undertaken sports betting with the same brand before playing poker for the first time.
Between March and April 2020, leading provider William Hill reported a total net revenue drop of 57%, with sports wagering down 70%.
With the absence of real-life sporting events players turned to fictional ones with a spike in April because of the Virtual Grand National. In the first months of the pandemic, the number of daily virtual sport players increased by 30%.
Novelty sporting events had kept the interest going, but notable recovery in sports betting participation was seen after the return of the Bundesliga and the Premier League.
Tech Innovations Are A Driving Force For The Industry
Even before the pandemic the online gambling industry was growing at an exponential rate due to the emergence of new technologies such as hybrid games, chatbots, machine learning, artificial intelligence (AI), virtual reality (VR), and augmented reality (AR). Among these VR gambling is shown to be the fastest-growing to 2022, at an annual rate of more than 21.5%.
Reports show that the incorporation of cryptocurrencies, more specifically of bitcoin, will be a driving force in the growth of the gambling market over the next few years. The pivot to blockchain technology integration is no surprise, since the gambling industry is often an early adopter of tech innovations. Though security risks and the shady reputation of cryptocurrencies have been raising issues in the sector, there’s no denying the increase in interest of consumers.
Esports have reaped the benefits of being perfect for socially distanced competitions and they are expected to bring a whole new demographic into the world of online sports betting.
In 2020 Esports viewership (occasional viewers and enthusiasts) has grown to 495 million people, a year-on-year growth of +11.7%. Projections for 2023 put audience numbers at 646 Million. This has definitely impacted the industry, clearly shown in the record-breaking prize pool for Dota 2’s flagship event “The International” of US$ 34.3 million.
The overall Esports betting market size is projected to double in 2020, from US$ 7 to US$ 14 billion. The gross gaming revenue (GGR) generated by Esports betting globally, tracking at US$ 343 million for 2020, is expected to reach US$ 862 million by 2024, placing it in the top-5 sports worldwide.
What the Future Holds
As we’ve seen from the past year, the future is hard to predict. While the industry has reacted swiftly to the changes brought on by the pandemic there’s no way to know what will come next.
Players are actively drawn towards innovation and interesting perspectives of classic concepts. Virtual technologies, especially those striving to be more realistic and engaging, have taken a lead in these times of social distancing. It’s important for companies to adapt to changes in the market and their customers’ interests so they remain profitable and competitive.
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- Newzoo, 2020 Global Esports Market Report
- Statista, “eSports audience size worldwide from 2018 to 2023”, 28 April 2020
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