As those who follow the sports industry have seen, the absence of live events available for fans has created a tremendous appetite for sports content, leading companies across the spectrum to resort to airing classic games, H-O-R-S-E competitions, and various creative solutions in between. This impact has been seen most prominently in the gambling industry, which has seen providers like DraftKings (a Taylor client partner) make radical changes to their platform to engage their userbase, including betting on the few overseas sports that are still active (like table tennis), prop bets on taped television shows, and even fast-tracking various esports competitions to be included as an option.
Recently, the WHY Group and Scout 360 released a study around the habits of sports bettors changing during the pandemic, and the results are a bit fascinating. According to the poll of U.S. adults, 45% of bettors and 20% of sports fans overall say they are still wagering on sports, including simulated events like the Virtual Grand National, a simulation of the United Kingdom’s Grand National Steeplechase which drove $3.3M in bets. Prior to the COVID-19 outbreak, 40% of fans say they’ve at least tried sports betting, and just under that number say that are making more random bets on things like availability of toilet paper at their grocery store. Below is a graph from the study to show where betting trends have gone in the past couple of weeks:
To find out more about the impact on the industry, I listened into a conversation with Rebecca Giden, a senior analyst on the sports gambling industry, hosted by EGR, the world’s leading industry-focused gambling sector publisher. Giden addressed the major growth of niche sports interest across the country, saying that states are doing everything possible to provide live action within their regulations. Gambling mainstays Nevada and New Jersey have led the charge, with the former blowing out its esports offerings including being the first to allow betting on ES1 DOTA in Los Angeles last month, while the latter has embraced worldwide competitions of lawn bowling, handball, snooker and table tennis.
Interestingly enough, Giden doesn’t see the outbreak having that much effect on the sports betting space in the long-term, however. Regular sports will take the spotlight back as soon as they are able, and states will continue to legislate legal betting. Currently, about 40% of US residents live in a place with some form of legal online sports betting, and while the expected growth has slowed this year, she expects that should increase to as high as 80-85% by 2023.
The bigger impact, in her opinion, would be with iGaming (online casino games). Many states with legal online betting do not give gamblers the same freedoms with online poker, blackjack, etc., but Giden expects that to change as more states look at opportunities for revenue while people are at home. Also, many states require in-person registration for their iGaming activities, which prevents anyone who hasn’t already been registered from gambling online now, cutting out millions of potential earnings. Expect states to push more digital options, both for exploring and playing online games.
So where does that leave the industry? In an optimistic scenario, casinos and sportsbooks will likely operate under-capacity whenever people return to in-person wagering, as the combination of consumers having less disposable income, likely travel restrictions and venues imposing social distancing could have major effects on the experience. As of April 19, hotels like the Wynn in Las Vegas began announcing new protocols for sanitization for its casino when people are allowed back in, and they have the potential to slow the games down quite a bit. Giden expects a return to casinos more likely in the fall, and that should align with more available data about online gambling that could encourage states to push forward more iGaming options.