The hottest topics of the month are still the COVID-19 outbreak, which continues to reach new highs by the hour, and how the pandemic’s aftermath will affect people’s daily lives, businesses, and the global economy.
The gambling industry is no exception. COVID-19 is having a severe impact on betting and wagering, and the picture is looking particularly grim for some iGaming business sectors. Live sports betting sites will suffer significantly due to its direct dependence on the professional sporting events that are being postponed and canceled.
However, just like in the rest of life, not everything is one-sided - for every loss, there is a gain. Bets must go on, and regardless of the current state of the live sports scene, the demand for gambling as an outlet for entertainment has not changed. And while sports leagues and championships are taking a timeout, the virtual sports betting sector is only getting warmed up.
Live sports betting bites the dust
As the coronavirus wipes out football and other major anticipated sporting events, a number of large operators are preparing to suffer some massive losses, and have shared their predictions on the scope of the crisis.
- Flutter Entertainment, which generated 78% of its revenue from sports betting in 2019, has estimated a reduction of £90-110 million ($110-$135 million) in EBITDA based on the assumption that the current state of affairs will continue through August.
- William Hill announced that as 53% of its revenue came from sports betting last year, it was anticipating an EBITDA reduction of £100-110 million ($122-$135 million) for the year.
- GVC, which earns about 45% of its revenues from sports betting, has announced an estimated reduction in EBITDA of £130-150 million ($152-$176 million).
However, there is a flip-side to this coin. Some are claiming that the pandemic won’t be as deadly for them as it will for the rest of the sector. Gambling affiliate Better Collective has predicted that the company’s revenues won’t be noticeably reduced by the pandemic, as while online sports betting revenues will decrease, esports and casino gaming will stay the same.
As you’ll see below, just because betting on live sports events is suffering doesn’t mean the industry has to implode. Punters will seek out online betting opportunities no matter where they are. Some operators and key industry players have already taken note and adapted accordingly.
Virtual Sports as a panacea for the virus
Discussing the crisis, Newgioco CEO Michele Ciavarella has noted a marked increase in mobile betting, pointing towards a result that anyone could have predicted - as land-based gambling opportunities disappear into thin air, bettors will turn to the internet. Ciavarella stated: “We are adjusting operations as though we are in the off-season period by taking this time to foster our other gaming verticals, such as virtual sports, online casino, poker and other products. Despite the land-based shutdown, our clients are still seeking leisure entertainment from home or on mobile, in which we are seeing a measurable increase.”
A statement by Ulrik Bengtsson, CEO of William Hill, supports the same idea as Ciavarella. Addressing how the bookmaker is navigating the crisis, he said "People want to place sports bets and they will continue to do so where possible. In recent days we've seen betting on horses, greyhounds, international football and our well-established virtual sports.”
The evolution is a solution
Any ecosystem has its own process of natural selection - the decline of one species gives room for another to thrive, the iGaming sphere is no exception. The void left by live sports betting will now allow virtual sports betting to evolve and flourish.
The growing demand for virtual sports betting will inevitably lead game developers to improve their products. In the interest of customer satisfaction, we will likely witness the evolution of virtual sports - from more realistic graphics and better UX to the implementation of new technologies, such as virtual and augmented reality, bringing gameplay to another level. While such technological advances will take time to be implemented, some game developers have been quick to react and have already found a solution to fulfill the immediate need for innovation.
Betradar, a virtual sports and sports betting data feed provider, has found an elegant solution to the problem of lost revenue. The company is going ahead with their virtual Euro 2020 tournament, giving punters a betting option they otherwise wouldn’t have had.
Betradar’s Euro 2020 tournament is a perfect example of the capability that virtuals have to fill the sudden gap in the market. Potentially, any major sporting event that has been canceled could survive in its virtual form instead, giving operators a long list of events they could simulate.
Operators that already feature virtual sports betting products will see increased activity, and the rest will try to offset their losses through transitioning to the virtual segment of the online betting market.
The virtual sports vertical is not only a great way to compensate for the lack of real sports betting options, but also to provide a neat backdoor for cross-selling. Dedicated live-action sports bettors who turn to virtuals could see the value in 24/7 betting opportunities and be more liable to try their hand at slots or roulette.
For those who have not yet embraced virtual sports to their casino offering, Slotegrator has a business-vaccine in the form of virtual sports game content from Golden Race and Betradar, as well as software solutions for sports betting and online casinos. Contact our sales team below to quickly integrate virtual sports and revive your betting revenues.
H2 Gambling Capital is the industry’s leading data and intelligence team, with over 20 years of tracking the sector.
Flutter Entertainment is a bookmaking company that was formed by the merger of Paddy Power and Betfair. It also operates under the brands Sportsbet, TVG, and Fanduel.
GVC is a sports betting holding company that operates Ladbrokes Coral, bwin, Sportingbet, Betboo, Gamebookers, Vistabet, and Neds.
William Hill is one of the world’s largest online sportsbook operators.
Better Collective is an education platform developer that aims to make the global sports betting and gambling industry entertaining, transparent and fair.
Newgioco is a major Italian sports betting agency. It is one of the fastest-growing and most advanced online bookmakers in the industry.
Betradar, which offers a suite of bookmaking tools including odds suggestions, is a branch of Sportradar, a major international sports betting and data feed company.