When 2020 started, the gaming and betting industries were on track for a great year. ICE London 2020 was showcasing some promising new technology and it looked like the gaming sector would continue its upward trajectory in 2020. Unfortunately, the unexpected arrival of the COVID-19 virus flipped everything on its head. Almost every sector was impacted in some way, and the gaming and betting sectors were no exceptions.
Casinos, especially those located in major, tourist-reliant cities, like Macau, saw the biggest impact, with reported revenue loses by as much as 97% year-on-year due to the impact of COVID-19. However, it wasn’t just casinos that suffered, as the suspension of most sports meant that bookmakers also saw losses. William Hill reported a 57% year-on-year decline in net revenue due to the virus, and in August, Veikkaus, the Finnish monopoly operator in this space, projected a loss of over €300m in profits in 2020.
There’s no escaping the fact that the gaming and betting industry has been hugely impacted by COVID-19 however, in other areas of the sector the story has been very different.
Welcome to the digital world
Earlier this year, our I discussed the future of the iGaming sector, commenting that it was likely to see impressive growth this year. These insights were seemingly accurate, although not for the reasons I originally thought, which were more about the new innovations the industry was seeing with VR and eSports receiving more recognition. As a result of COVID-19 and the lockdown measures that followed it, many moved to online gaming and with them, all the big opportunities for success.
In April 2020, a month into the UK lockdown, The Stars Group announced it was expecting a record revenue of around US$735 million for Q1 2020, up 27% from the previous year, due to a surge in players as a result of COVID-19. Then, in June, 888casinos upgraded its 2020 profit expectations thanks to a daily revenue climb of 34% year-on-year in H1. These are not the signs of companies suffering, as a result of the pandemic.
These revenues aren’t just good for the companies, they’re good for individuals looking for work. COVID-19 has seen an increase in unemployment across many sectors, but for iGaming businesses, the increase in users creates a need for more staff. As early as April 2020, iGaming businesses were being encouraged to hire new talent to keep operations running and growing.
Sports vs. eSports
As of writing, the threat of COVID-19 is not over and in the UK we are currently in the midst of a second lockdown. However, cases have been decreasing in many countries and governments worldwide have been encouraging a return to normality for many industries if possible. This has caused a big turn-around for the traditional gaming and betting industry.
The biggest change came in Q3 2020, with the return of major sports leagues, and thus the return of betting activity. The return of major sports such as football and the reopening of bookmakers has increased betting activity globally with GVC noting that betting activity is nearing pre-pandemic levels. However, despite this return the iGaming scene has not deterred in its growth.
The eSports space saw a tremendous increase in attention due to the lack of traditional sporting events during COVID-19, and new fans are unlikely to outright abandon eSports just because traditional sports have returned. Online gaming also continues to trade ahead, according to the GVC, with online revenue up by 22%.
While customers might experience a different feeling, sitting in front of a computer or phone instead of around a table with other people, there are very few negatives to eSports. For operators, the differences are wholly positive. Online gaming gives operators more control and makes payments easier to manage because they are automated and only require a strong end-to-end payment solution to keep data secure.
Looking towards the future
Many changes had to be made during lockdown to accommodate a new way of working. However, just because many places have reopened their physical operations it does not mean that the advancements and innovations made during lockdown will go away. Instead, COVID-19 pushed innovation forward by necessitating new advancements not previously considered by the industry.
In our recent ebook, ‘Supporting Businesses and Payments Throughout COVID-19’ we discussed many of these innovations and how they are, and will continue to, have a positive effect on the industry and everyone involved within it. You can read that ebook on our website and discover the thoughts of our gaming experts on the current state and future of the payments industry.