For many people, September 14 was a day to remember. It was the first time in over a decade that the US had witnessed a day without football. College football season came to a halt and even the NFL did not completely escape the pandemic: NFL games originally scheduled for September were either postponed or cancelled.
The impact of the pandemic was arguably most felt within the sports betting industry, as the American public chose to stay at home and avoid places of worship in an effort to avoid getting sick. This undoubtedly led to fewer people placing bets, and thus fewer people earning money from betting. It also meant that many of the industry’s largest companies faced unprecedented challenges as they tried to serve their growing customer base during the pandemic.
This was certainly not the case with Bookmaker, which saw its customer base increase by 45% from August 15 to September 14. With the majority of bets now settled by telephone or online betting exchanges, the time of the day no longer mattered; Bookmaker’s business simply shifted to the digital sphere.
While it is still early days, it is clear that as the world tries to get back to ‘normal’, the sports betting industry is going to have to adjust to a new normal – one in which they are going to have to work a little harder for their customers. Here we take a look at just some of the issues the industry is facing as a result of the COVID-19 pandemic and how long these changes are going to last.
Sports Bookmakers Are Weaker Than Ever
If there was one place that saw the impact of the pandemic first-hand, it was sports betting companies. Millions of Americans tuned out of sports and placed fewer bets, while others took their betting activities online, where the ability to gamble wasn’t restricted by location.
The day after the start of the NFL season, William Hill – one of the UK’s largest bookmakers – admitted that the pandemic had put a huge question mark over the health of the sports betting industry. In the months leading up to the pandemic, William Hill had reported strong profits, in part thanks to the NFL and its fans. But things changed on September 15, when the company reported a 47% drop in profits for the previous three months, as bets came flooding in from Americans anxious to place bets during the pandemic.
Not all bookmakers coped well with the changes and adjusted their business models. Two of the largest poker companies in the world, PokerStars and Full Tilt, filed for bankruptcy protection in the spring of 2020. The poker world mourned the loss of these companies, as well as the many jobs that disappeared as a result of the pandemic.
The Growth of Online Gambling
While many within the sports betting industry saw their business decline as a result of the pandemic, the online gambling industry saw a windfall. Americans who had turned off their televisions and went online looked for entertainment and the ability to place bets, respectively. Online gambling is now a $14 billion industry in America, and experts predict that number will grow to $16 billion in 2021.
Not only did online gambling thrive during the pandemic, but some forms of online gambling – namely poker – saw a surge in popularity. According to PokerRoom.com, US casino and poker site traffic grew by 71% between April 2020 and March 2021.
One of the reasons why online gambling grew so quickly during the pandemic is because it is now possible to play wherever one chooses – regardless of location. Thanks to technology, people from around the world can connect with each other and take part in online gaming even if they are thousands of miles apart. Back in March 2021, the World Health Organization noted how mobile phones can help fight the pandemic, as they “provide a platform for people to interact with each other and share information, which helps stop the spread of COVID-19”.
The ability to play online casino games has also opened up a whole new world of betting opportunities for people who love to gamble. Before the pandemic, the industry relied heavily on brick and mortar casinos and their proprietary software to offer customers the ability to bet on sporting events. But with many people now working remotely, this level of service isn’t needed – especially as companies like Bookmaker and William Hill admitted that distances do have consequences when it comes to placing bets.
Shifting to a More Electronic Gaming Environment
The increase in online gaming has forced sports betting companies to adapt. Many now offer their services through online betting exchanges – platforms that allow customers to place wagers on sporting events with minimal to no commissions. With many companies adjusting to a more online gaming environment, this has led to a decline in revenue, as people no longer need to go to a casino in person to place a bet.
While many people credit the rise in popularity of esports for keeping sports betting relevant during the pandemic, the industry itself concedes that changes are necessary. The Entertainment and Gaming Association (formerly the American Gaming Association), a trade group that represents the sports betting industry, acknowledged that the face-to-face interactions between sports bettors and casinos no longer exist. The membership of the association – which now consists of esports organizations, casino operators, and racetracks – has shifted towards a more electronic gaming environment, as people are doing everything remotely.
Even the traditionally more ‘real life’ form of gambling – such as placing a wager on the World Cup final or the Kentucky Derby – is slowly transitioning to a digital sphere. In-person betting lines in major American sports are now offered over the phone or online, as many people are afraid of meeting others due to the pandemic.
There is no question that the sports betting industry is going to have to change. Not only are many of its largest companies filing for bankruptcy, but its very existence as we know it is likely to be up for debate in the coming months and years. For decades, people turned on their televisions every week, tuned in to see which team won the World Cup, and placed a few bets here and there. But it is unlikely that we are going to see the return of the ‘good Ol’ days’ of placing bets in-person at a casino. Things have changed – and not just because of the pandemic.