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How COVID-19 is Affecting Gambling

The novel coronavirus, also known as COVID-19, has devastated industries and economies all over the world. With restrictions on movement, social distancing, and lockdown, it’s been almost impossible for many businesses to continue to operate.

Casinos are part of the entertainment industry which has been hit particularly hard. But how has gambling been affected overall and have any alternatives been found?

how covid19 is affecting gambling

Land-based Casino Closures

There are fewer land-based casinos in India compared to other countries in the world. There are only two states which permit land-based casinos to open: casinos in Goa and Sikkim.

Both of these Indian states were quick to close down their casinos in March, along with other public places such as swimming pools, gyms, and cinemas.

This move by Indian states echoes the stance taken by countries all over the world. Due to the risks in allowing casinos to remain open, authorities have closed the doors for the foreseeable future.

Even the most famous gambling location in the world, Las Vegas, has shut down to allow COVID-19 to pass. The strip hasn’t been shut down since the state funeral of JFK in 1963, so the decision to close is monumental.

It hasn’t been without controversy: the mayor of Las Vegas opposed the governor’s decision to close for so long, instead preferring a short closure of just 7-10 days.

However, in the face of spiralling figures and no signs of the curve flattening, the governor of Nevada extended the casino closure for Las Vegas for even longer.

The concern is that the longer the casinos remain closed, the higher the possibility of job losses. Casinos are able to access the emergency fund for businesses set up by the US government, but there has already been criticism of tax-payers money being used to prop up casinos.

The fund is an enormous $454 billion, out of a total $2 trillion relief plan announced, but this money has to be shared among all businesses.

Macau Land Casinos

Macau casinos are the exception as after a brief closure in February they have reopened. With over 40 casinos in the region, around 80% of the local economy is based on casino revenue. Remaining closed for the long-term would have a catastrophic effect on everyone who relies on casinos for income.

Even though the gaming halls are open again, it’s not business as usual. Tourists are not permitted to enter, for fear they might be importing the virus from overseas. Not that there are many tourists in Macau any more; figures estimate that tourism has dropped by approximately 98% compared to 2019.

Inside the casinos, there are yet more restrictions. Half of the tables are closed to ensure players can maintain a proper distance and half of the seats are closed too.

As an example, although the baccarat tables are open, only four players will be permitted rather than the usual eight. There are also temperature checks, mandatory face masks, and a health declaration for both workers and guests alike to sign.

The cost of keeping the casinos open has been high too. Just to keep everything running costs between $1.5 million and $4 million every day, while at the same time generating virtually no profit.

Despite these financial losses, Macau casinos will receive no assistance from the government. The relief being provided is being directed to workers and small businesses, with casinos expected to swallow any losses.

Sports Events Cancelled

With more than two million people infected and tens of thousands of deaths, it was inevitable that sporting events would have to be cancelled. As play in various sports was temporarily ceased, the longer-term impact on significant events started to be realised.

During summer 2020, the Olympics was due to take place, an enormous global event which has now been postponed for a year – at least.

Football has been profoundly affected by a domestic and international level. Major sporting tournaments such as the Euros and Copa America have been deferred until 2021, while the Champions League, African Nations Championship and CONCACAF Nations League Finals have all been postponed or suspended.

Domestic leagues around the world are sidelined too, with authorities trying to figure out when it’s safe to return and how they’ll do so. Possibilities such as playing behind closed doors have been mooted, but no agreement has yet been reached.

In some countries, football training has cautiously resumed, but still subject to social distancing. This has made it difficult to carry out any meaningful practice but is helping to keep players’ fitness levels up.

There are only three countries where sporting is still taking place: Nicaragua, Taiwan, and Belarus. This has allowed minimal sportsbook activity for online firms.

It’s not just football and athletics that have been affected: motorsports, tennis, basketball, boxing, baseball, golf, cricket, hockey and horse racing are just some of the most popular sports which have been cancelled or deferred.

Sports betting is a large business, and the loss of it will be another massive blow for betting firms. In Nevada alone, $500 million is spent every month on sports wagers. Worldwide, the cancellation or postponement of so many sports events will translate into the loss of billions of dollars.

The Impact on Online Gambling

With no sports being played, online gambling sites don’t have a lot to offer customers right now, when it comes to sports – unless they have a casino element to their business.

Although it’s not possible to bet on sports and tournaments, that doesn’t mean that betting is off the agenda entirely. With casino games, online slots, and poker, there’s a vast number of options for anyone who wants to play online.

The industry has rapidly expanded in recent years, with more countries around the world legalising online play, increasing the reach of online betting operators.

In most of India, it’s illegal to bet at a land-based bookmaker or betting shop, but the law is very different for online play. Indian punters can place a bet with an international bookmaker based outside India without breaking any laws.

There is nothing in the current Indian legal system which refers specifically to online gambling. This means that India, like many other countries around the world, has a healthy appreciation for betting firms online.

Governments of several different countries have expressed their concerns about the combination of lockdown conditions and online betting.

Some nations have moved to either impose caps on betting or block it entirely for a limited time, such as Portugal and Sweden.

There is a question about how much appeal casinos, slots, and card games hold for those who usually bet on sports. Some experts believe the crossover won’t be particularly high, with sports punters instead preferring to switch to esports.

Looking at online sportsbooks, esports is now being prominently displayed with customers being signposted to this as an alternative.

Despite this, online casinos have seen a massive spike in online play with some reporting rises of up to 67%. Online card plays with live dealers have also seen a significant increase.

One provider, Global Poker, reported a spike of 43%. There was an especially big jump in first-time online poker players, with the number rocketing by 255%.

The Rise of Esports

Esports has gradually risen in popularity and prominence in recent years, even during normal times. LAN tournaments have become huge affairs, with people travelling considerable distances to meet up for play with other enthusiasts.

Watching and betting on LAN tournaments has become big business, and similar types of digital play are providing a solution in the absence of the real-life sport.

Although it’s not possible to hold large LAN tournaments, the development of technology and the prevalence of platforms such as Twitch and YouTube has meant it’s possible to still bet on the play.

Live betting on these types of esports has been around for several years, and as sports events have temporarily ceased, esports have stepped in to fill the gap.

Technically, any type of online game could be included in esports, but those which are universally well-known tend to be the most popular. One of the top examples includes FIFA, a game that the vast majority of gamers and bettors alike will be familiar with.

Experts believe that there is such a stronghold of esports developing that even when the threat of the virus recedes, the passion will remain.

While esports will never be a complete replacement for real-life sport, it’s expected that the recent surge in interest will linger beyond COVID-19.

Tough Times Ahead?

Gambling firms are undoubtedly facing challenging times ahead, with many experiencing a significant chunk of their value being wiped off on the stock exchange.

Any gambling firm with a heavy reliance on either their land-based casinos or sportsbooks will have to swallow heavy losses which are unlikely to be offset by the increase in online play.

However, those who are solely or primarily associated with online casinos and card games could find that their fortunes move in the opposite direction, with more players than before signing up.

With indications that the lockdown and social distancing is liable to last for a considerable amount of time globally, gambling firms will have to adjust to a new world of esports and online play if they want to survive.

Last updated July 28th, 2020