Lorien Pilling, director of Global Betting and Gaming Consultants, discusses some of the conclusions from the latest edition of the company’s Global Gambling Report which suggests the international landbased casino industry could take several years to recover from the business impact of the coronavirus pandemic.
The world’s casinos will be the gambling sector hardest hit by the global pandemic shutdown in 2020, according to the 15th edition of GBGC’s Global Gambling Report. Casino gaming is the largest sector of the global gambling market but is forecast to lose a quarter of its revenues in 2020. There will be some recovery in 2021 but it will take until 2023 for the sector to get back to its position before the pandemic struck.
Earlier this year, GBGC began recording the measures being imposed upon casinos by governments in various jurisdictions, as they tried to limit the spread of the virus. Throughout March and April 2020 it was possible to track of the measures as they spread across the world from east to west.
Macau’s casinos were the first to close in early February for a period of 15 days. Whilst they have since reopened, their revenues are still dramatically lower than last year because of the ongoing travel restrictions in the region. South Korea followed Macau at the end of February. It was in mid- March that casinos in Europe and North America began to close.
The impact of the closures was too much for some operators, coming on top of preexisting problems. In May, Silver Heritage Group entered voluntary administration. The company had been forced to temporarily close its Nepalese casinos as part of a lockdown, where gatherings of more than 25 people were prohibited.
Online casino and poker, however, is predicted to be the one sector of gambling which increases its global revenues in 2020. A combination of a lockdown, the lack of live sport and increased disposable income has led to a boost in online play. As a result, internet gambling will increase its share of all global gambling to more than 13 percent. But this increased activity might not be sustained as lockdowns end, other spending options return and regulators impose restrictions on deposits, bonuses and adverts.
GBGC’s prognosis for the global casino industry: “There will be some recovery in 2021 but it will take until 2023 for the sector to get back to its position before the pandemic struck.”
The outlook for all gaming sectors is uncertain. The International Monetary Fund (IMF) has written that “many countries face a multi-layered crisis comprising a health shock, domestic economic disruptions, plummeting external demand, capital flow reversals, and a collapse in commodity prices. Risks of a worse outcome predominate.”
Any future recovery depends on multiple factors. It is hard to predict which will be the most influential and how they will interact with each other:
• The lifting of national lockdowns.
• The risk of ‘second waves’ of infection, resulting in further partial lockdowns.
• Recession and unemployment reducing consumers’ disposable income and desire to spend.
• Sustained changes in consumer behaviour and spending habits.
• The ability of venues to re-open and the measures that must be put in place.
• International travel will be restricted for a prolonged period. This will hurt casinos that rely on foreign customers, both mass and VIP.
• Some regulators are permitting casinos to extend their opening hours – when they re-open – and/or increase the number of gaming tables.
• Gambling taxes are likely to rise to help pay for government spending – it is an easy tax to raise and collect. But it might increase illegal gambling in some jurisdictions
• The recession and need for tax revenues could spur governments to regulate gambling activities.
Casinos in several jurisdictions have shown themselves extremely adaptable in the measures they have introduced to try get back in business. But, as the UK government’s unexpected decision to exclude casinos from the list of venues permitted to re-open in July, those safety measures have seemingly proved insufficient.