Bookmakers heaved a sigh of relief last week as betting shops reopened in the UK and sports fixtures started to return across Europe after the pandemic-enforced break — even if they were behind closed doors with simulated cheers.
Sports betting is crucial for gambling companies. According to the European Gaming and Betting Association, two-fifths of annual gross gaming revenue, about €2.4bn each year, is made from sports wagers.
More than half of this is made through “in-play” betting, where punters put money on outcomes such as a race’s eventual winner or a game’s next scorer while the action is taking place.
But gambling has never witnessed such disruption to its business as from the pandemic. The cancellation of Uefa’s Euro 2020 competition this summer only added to the pain as the industry viewed the football competition as a prime calendar event to attract new customers.
Kenny Alexander, chief executive of GVC Holdings, which owns the Ladbrokes and Coral betting brands and was catapulted into the FTSE 100 during lockdown, said that the return of the Premier League and Ascot Racecourse’s royal meeting this month had been “fantastic”.
“At the end of the day, we are here to provide entertainment for the millions of customers in Britain who enjoy a bet, and that is a lot easier when there is quality sport to follow,” he said.
Analysts at Regulus Partners estimate that in northern European markets, gambling revenues have fallen between 40 and 60 per cent since coronavirus lockdowns were implemented in March.
While not enough to offset this loss, bookmakers have seen a spike in online activity during lockdowns. Slots and gambling games proved popular but online casino and poker sites had the biggest boost.
In May, the UK FTSE 100-listed Flutter Entertainment said revenues across its sports-focused PaddyPower and Betfair brands had fallen 54 per cent in the quarter to mid-May compared with the same period last year. However, this had been cushioned by a 92 per cent like-for-like increase in revenues at The Stars Group, the poker and gaming company that Flutter completed a £10bn merger with last month.
Simon French, a partner at the consultancy Bixteth Partners, said that although lockdowns would have made punters more accustomed to betting online, the segment, as a share of the entire market, remained relatively small.
“Online penetration going into Covid was only around 12 per cent and it will only be around 17 to 18 per cent post-Covid,” he said.
Stadiums and racetracks may be eerily quiet as sports restart, but one odds-on bet is that the gambling groups will be joining millions of armchair fans cheering on the action.