During the height of the pandemic last year, the world of sports was turned upside down. With the cancellation of sporting events and the postponement of some, fans were left deprived of that next ball game or tour de france. While mainstream sports may have struggled, the world of gambling took a significant hit. As a result of the lessened interest in wagering, many bookmakers shortened their odds lines and ultimately, shut down their shops.
The bettors who were unfortunate enough to suffer the loss of a favorite sporting team were left wondering, “What happened?” In this article, we’ll explore the significance of the betting line going down and how to prepare for and react to such an event.
The Bookmakers’ Take
Before we begin, it’s important to note that bookmakers have nothing to do with sports or gaming. They are simply the people who take your bets. After the pandemic, many sportsbooks couldn’t bear the financial burden of making payouts to winnings betors, and so, took a loss. Figure 1 shows the amount of money wagered on sports games in the United States from January 2021 to June 2021. As you can see, the amount of money wagered dropped by almost 50% in June 2021 compared to January 2021.
The Economics of Sports and Gaming
In 2021, the world of sports and gaming will try to rebuild itself and bring back the fans who have lost interest in these pastimes. One way to do this is by raising revenue, which in turn, can be used to lower margins and eventually, turn a profit. Margins, in sports and gaming, are the costs associated with running the business, such as payroll, utilities, and rent. Raising revenue typically means increasing betting volumes, taking bets on more games, and offering better odds.
While many bookmakers will try to re-establish themselves as soccer specialists after the pandemic, the overwhelming majority of their focus will be on rebuilding their books and getting back to normal. One way they can do this is by increasing their betting volumes on sports and gaming. In general, increased betting volumes will lead to increased profits. However, during a time of economic uncertainty, increased betting volumes can also lead to decreased profits because the games will be more close (or even spilt) and there will be fewer large bets. Large bets in sports and gaming, as we’ve mentioned, tend to offset the smaller bettors. The fewer large bets, the more even the odds will be, and the fewer odds, the less money wagered. It’s an interesting ecosystem that can be quite addictive.
Why Did the Betting Line Go Down?
A big reason why the betting line went down after the pandemic is because fans weren’t comfortable wagering on sports and gaming events. First, they didn’t want to put any money on a game they weren’t sure would go ahead. Since sports and gaming are reliant on the ‘flu season, which is typically from October to April, many fans were hesitant to commit to a wager, especially with the uncertainty surrounding the pandemic and how long it would last. Second, many fans still hadn’t gotten over the shock of the pandemic and were treating sports and gaming as a form of escapism. Third, many fans lost trust in bookmakers, seeing them as ‘middle-men’ who were taking big cuts, simply enabling them to cover their own costs and turn a profit. Last, but not least, it’s important to note that during the pandemic, people were more aware of their health and what was happening around them. In general, people were trying to stay indoors and avoid crowds, which in turn, decreased their desire to wager. The fewer bettors, the fewer bets, and thus, the lower the betting line.
Many bookmakers have shuttered their doors once and for all, due to the pandemic. We were lucky enough to avoid the bust for the time being. However, that doesn’t mean that things will be easy. In 2021, the world of sports and gaming will try to rebuild itself and bring back the fans who have lost interest in these pastimes. It will be quite an ecosystem shift and a lot of work. One way to do this is by raising revenue, which in turn, can be used to lower margins and eventually, turn a profit. Another way is by increasing betting volumes, taking bets on more games, and offering better odds. In this new world, the betting line will be more critical than ever.