- A second wave of COVID-19 is hitting hard throughout the world including the United States and most of Europe.
- A growing number of local, state and federal governments have implemented new restrictions and ‘stay at home’ orders.
- Sports betting is in good shape to not only survive but thrive during a second wave shutdown.
When the coronavirus pandemic brought the world economy to a standstill earlier this year the hope was that by late 2020 the situation would be at least trending toward some measure of normalcy. That hasn’t happened and to the contrary looks less and less likely in the near term. A ‘second wave’ of coronavirus infection has impacted many countries around the world including the United States and much of Europe. In the US, the 7 day moving average of daily new cases has reached a new record every day for the past ten days. Although vaccine development has provided hope on the horizon it’s now evident that things are going to get worse before they get better.
With the resurgence in COVID-19 infection has come a return to government imposed restrictions on day to day life. There has been a return to widespread ‘lockdowns’ in Europe though in the United States most state and local governments have taken a more selective approach, at least for the time being. No matter what regulatory requirements governments issue the end result will be the same–fewer opportunities for ‘in person’ activities like dining, shopping or traveling and much more time spent at home.
The hope is to minimize collateral damage to economies whenever possible. The extent to which this is possible remains to be seen. Some business are taking a beating just like they did the first time around including restaurants, fitness centers and bars. Anything related to travel and tourism is getting hit hard as well including the retail gaming industry. Las Vegas offers a helpful glimpse at the problem in microcosm–the city is dealing with a moratorium on conventions, less leisure travel, lower hotel occupancy and weaker gaming revenues. All of this has a severe impact on the regional economy and at this point there is little ‘light at the end of the tunnel’.
DESPITE RETAIL GAMING’S STRUGGLES SPORTS BETTING IS GENERALLY IN GOOD SHAPE
So what about sports betting? One of the more intriguing things to come out of the first round of COVID-19 shutdowns was the way that sportsbooks managed to muddle through with most of the world’s sports leagues shut down. Faced with a situation that no one could have anticipated, sportsbooks around the world got real creative real fast. They did everything imaginable to come up with betting markets for their customers including niche sports such as table tennis and Asian baseball, a greater emphasis on esports and virtual sports and where they had the regulatory freedom to do so booking more pop culture and political wagers.
Once pro sports started to return–mostly without fans in attendance–it was no surprise that sports betting enjoyed booming business. There was a confluence of factors at play to produce these strong revenues including pent up demand, growing availability of mobile and online wagering and unusual scheduling that meant that more major sports were happening at the same time than ever before. One interesting takeaway from all of this was that many of the ‘niche sports’ like table tennis continued to enjoy strong betting interest even with NBA, NHL and NFL action on the board.
The success or failure of sportsbooks in the coronavirus era was–and is– predicated on the availability of mobile and online betting options. Jurisdictions that allow sportsbooks to offer mobile/online wagering and otherwise provide a significant degree of competitive freedom are in good shape. If anything, this should underscore the imperative of allowing sportsbooks to offer ‘off premise’ betting. It was what customers wanted *before* the COVID-19 pandemic and has since become a prerequisite for success. In September, Colorado set a record handle for their nascent sports betting industry taking $207 million in wagering action. Of this amount, 98% was made via online/mobile platforms. Jurisdictions that don’t heed this obvious ‘wake up call’ on the necessity of mobile betting just aren’t working in the best interest of their licensees or consultants.
HOW WILL SPORTS BETTING FARE GOING FORWARD?
As long as they can offer online/mobile betting sportsbooks should continue to flourish during a second wave of COVID-19 shutdowns. In many ways, they check all of the same boxes as video games which were already a huge business but exploded in popularity during the COVID-19 pandemic. Sports betting is perfect for players forced to spend more time at home and needing entertainment and diversion. Demographically, there’s always been a good deal of overlap between video games and sports betting (though there are substantially more female video game enthusiasts). The mainstream media has caught on to the value of offering sports betting related content meaning its popularity and visibility will go nowhere but up. This is particularly true in the largely untapped US marketplace.
In addition to the intrinsic factors driving the popularity of sports betting there is a very important difference in the current milieu as opposed to the early days of the pandemic. Major sports have figured out how to keep going despite the challenges posed by COVID-19. The NBA is slated to start their 2020-2021 season on December 22. The NHL has yet to announce a start date but they’re weighing their options and there’s a lot to suggest they’ll start their 2020-2021 season in late December/early January. Many European soccer leagues including the English Premier League and Italy’s Serie A are already underway with their 2020-2021 season. College sports are more of a question mark–the Ivy League has already cancelled winter sports and while football continues they’ve faced plenty of COVID related problems.
Major sports competitions are in a situation where they need to keep revenues coming in my whatever means they can. That means continuing to play during the COVID-19 pandemic is somewhere between important and necessary no matter if they have to do it without fans, in a ‘bubble’ or whatever. At the same time, the pandemic is a great opportunity for sports leagues to attract new fans and leverage their now ‘TV centric’ product for new revenue streams and to enhance existing ones. One popular new revenue stream–ironically enough–is partnerships with sports betting related businesses.
Sports betting had already started to evolve to a ‘mobile/online’ first product before the pandemic. The pandemic has simply expedited this process. Retail sports betting will always have a place–there’s really nothing that can match the experience of watching Sunday NFL in a busy Las Vegas sportsbook–but going forward it will serve exclusively as an adjunct to the real revenue driver of mobile/online betting. Since there should be a healthy menu of sports on the board for betting and with bookmakers becoming more and more creative at finding new markets the next six months could see an unprecedented boom for sports betting very similar to what video gaming has experienced.