Coronavirus (Covid-19) and Its Impact on the Gaming Industry
Last updated: March 25, 2020
Last updated: March 25, 2020
Following Nevada Gov. Steve Sisolak’s decree on a 30-day closure of nonessential businesses, Las Vegas Strip is slowly turning into a ghost town. Empty parking lots and dining rooms, and abandoned streets is what meets your eye. The Game Developer Conference set this year has already been postponed to summers. The growth potential of the gaming industry is at stake. It’s all bare, Covid-19 has scourged the gaming industry.
In the eye of the storm are physical casinos. With the world seeking to flatten the spread curve of this highly infectious disease, social distancing remains the most effective approach. Countries have curbed travelling, which has left the tourism industry a half-dead. But it is the tourists who make up for a considerable chunk of physical casino customers
Macau, a celebrated gambling capital, closedown its casinos in mid-February over the spread of the coronavirus. That significantly dipped its gaming revenue. Its overall earnings crashed by about 88% in February 2020, and it can only get worse.
Last week, the American Gaming Association (AGA) came out seking bailout. It estimated that the casinos would lose $21.3 billion in direct consumer spending or more over the next two months if the situation remains as it the same! If the casinos stay closed, the segment could further lose of $59 billion in wages for workers in the industry and $34.4 billion in annual total tax revenue.
The coronavirus epidemic has created a new way of life for us – a life without sports. So, the impact is not limited to brick-and-mortar casinos. At the receiving end of this new world are betting firms. The coronavirus epidemic has wiped out the lucrative opportunities that the months of March and April often presents. Draftkings, Fanduel, and many bookies are forced to tally up their losses.
For example, William Hill had invested heavily to establish its digital presence in the US casino market. It funded much of this investment by credit facilities, and repayment primarily relied on the North American market to pay off. But with the current situation, that is currently impractical.
Also struggling is the publicly traded 888 Holdings. The company, which owns 888Poker, has warned its shareholders of the eminent drop in revenues. It blames the situation on the cancellation of various sports events. Sportsbetting accounts for nearly 16% of its revenues.
The lockdown restrictions to curb the spread of Covid-19 has wreaked havoc for most businesses. For online casinos, though, it is a blessing in disguise. Most gamblers, including technophobes who previously had no time for online gambling, are finding themselves playing games online. They are surprisingly enjoying the convenience that comes with playing at home. They can log in to stream live the casino games they love.
Also, most of these online casinos accept cryptocurrencies which eliminate the need for third-party to facilitate payments
Another driver for online gambling is the stress and anxiety caused by infections. Most people are worried and want something they can use as a diversion. Most punters have now switched to playing slots and other online casino classics, which are far riskier than sports betting.
Amid the lockdown, there is growing concern over the increasing number of compulsive gamblers. In the UK, for example, some MPs are calling on the gambling platform to impose a £50 daily cap on bets.
COVID-19 has challenged the establishment. It is perhaps the jab the world needed to realize the future of doing business is online. And gaming over the internet has its challenges, and legislators may just figure out how to address it now that they don’t have any option.
In the interim, gamblers still have an option of accessing their favorite casino games online. We are, however, afraid of the situation extends long enough, not even online casinos will survive this. Lack of income will slowly cut on the ability of players to play for real money. We can only hope the world will get a breakthrough in this fight to contain the spread of coronavirus as soon as possible.