COVID19 Impact on US Gambling
COVID19 has had far and wide reaching implications to many industries in the US. For the majority of businesses, the impact has been devastating disruption; whilst for others their businesses has been booming – think Amazon!
The impact to US Gambling has been significant to say the least.
- A shift is clearly seen from land based to online casinos.
- While sports betting, which was gathering momentum in 2019, has been stopped in its tracks.
- E-Sports remains unaffected, however there is a higher participation rate in gaming rather than wagering.
- Poker tournaments and card room venues have also been suspended indefinitely with only a small corresponding increase in online poker.
- A shift from bingo parlors to online is being felt, though not a strong as the shift to online casinos.
There are various reasons for the increase (or lack of) online gambling, depending on the form.
Let’s discuss each form of gambling and the impact that COVID19 has had on it.
In the year 2019, the US saw just over $70 billion gambled at land based casinos – almost split evenly between Commercial Casinos and Native American.
The top two states alone – California and Nevada, drew in the most gross wins at $13 billion and $12 billion respectively. New York, the state the most impacted by COVID19 with a staggering death toll, requiring stringent lock down measures comes in at third with a gross win of $8 billion.
With many casinos closed indefinitely and Players home bound, this is a recipe for disaster for the industry. Surprisingly, even though New York has been the hardest hit by the coronavirus, it is projected to only have a decrease of 8% across all forms of gambling.
Though California has not experienced the same severity of the impact of COVID19 as New York, many of the casinos there as well have also closed up shop. This has resulted in a projected reduction in land based gambling of a massive 21%. This translates to a decrease of $2.6 billion in foregone gross win proceeds. A truly staggering amount.
Many other states are projected to follow suite with reduced land based gaming revenue, with an average of 15% reduction among all US States.
As to when casinos will re-open to accept players is anyone’s guess. However, some have considered re-opening as early as June to get up and running again.
COVID19 has not only removed any opportunity to play at land based casinos, but it has also impacted employees. No longer needed to keep a casino operational, staff wages have been reduced by up to 50%, and that’s if they remain employed. Many have been furloughed with only the savings or borrowings to live on.
Needless to say, the impact of COVID19 has hit casinos hard. The road to recovery will not be easy. Many are planning for a slow re-opening with reduced capacity. Self distancing measures, the wearing of masks and hygiene will be costs to the casino, and these will no doubt hit their bottom line profits hard. But these costs must be incurred, if the casinos are prudent.
Having a COVID19 cluster occur would be detrimental to the business and also to players and staff. A cluster would damage reputation and, at worse, lead to players or staff launching legal action for breach of due care.
Players as well may show reluctance in returning to a land based casino. Not only are they now playing with money, but they are playing with people’s lives. The risk is of their own health while playing – especially of the older generation and those who are vulnerable – and those surrounding them could also be at risk which can be too much to bear on a player’s mind. On top of that, Players disposable incomes, in general, would be greatly diminished post COVID19.
Wagering amounts will be lower, costs will be higher, capacity will be reduced.
Many casinos are also supported by attached resorts, live performances and restaurants. The loss of these attractions only hinder the players (and visitors) mindset to considering going to a casino.
Do not expect a quick bounce back, to land based casinos.
The stakes are very very high, hence a fine balancing act needs to be carefully considered when re-opening.
Online casinos in the US tell a completely different story to the land based casinos. During late February to early March, a huge surge of online casino activity begun to appear as land based casinos gradually shut down. The uptake in online casino activity increased by over 100% in March and increased further again in the month of April.
“What we are experiencing is a huge uplift in playing at online casinos. Players still want to play their favorite slot games or casino table games, so they are turning to online gaming” – Phillip Wong (GambleDex.com)
A snap shot of website traffic via Google statistics provided by GambleDex shows that the uptake is not confined to several states alone. The uptake is spread almost evenly across the nation (allowing for population density).
“Playing at land based casinos is not only gambling with money, but the are also gambling with peoples lives. Unless a vaccine can be found, it would be extremely difficult to have an enjoyable time playing at a casino. I just can’t imagine anyone with commonsense, taking the risk of playing at a casino.
An online casino, though doesn’t have the same atmosphere, offers the same enjoyment factor, but in a slightly different way. Great jackpots, and winnings are still available, but you’re not going to get casino comps like discounted food and drinks. What you do get, are fantastic Welcome and Loyalty bonuses that go direct to your bank roll. Real money rewards instead of the peripheral perks of going to a casino.”
Phillip does caution the downside of increased online casino activity to a corresponding increase in scams.
“Around the world, there has been an increase in the variety of online scams, and that has not excluded online casino scams. Some sites have been found to be impersonating official real casino businesses. They often use spam emails with lucrative bonuses to attract innocent players. For anyone who is intending to play online, be alert when choosing an online casino. Stick to the big names and those which are licensed.”
Phillip is optimistic that the slots and casino table games won’t die and will mostly transition to online play. But a return to land base casino games is the most ideal for the US Gaming industry as a whole.
The year 2020 was supposed to be the year in which sports gambling was going to take off in many US States. In 2016, the overturning of the PASPA laws by the Supreme Court triggered a catalyst for change, but the COVID19 virus has truly stopped nearly all forms of sports gambling law reformation including sports wagering itself.
The one key driving factor to this disruption is of course the suspension of nearly all professional sports and college games. With out any games to wager on, sports betting has come to a halt (irrespective of whether it is online or not).
Sports Betting website – WagerDex (the sister site of GambleDex) – has seen close to a 90% reduction in traffic.
“This has been a crazy year. Though online casinos has flourished, we have really taken a beating on our site WagerDex. Obviously, there are no games to bet on; not only within the US but around the world. Yes, there are some exotic bets, but the core product of sports betting is sports! Without any sport games being played, all forms of sports gambling is effectively zero. There is one exception, and that’s horse betting. However, the majority of horse betting is required to take place at a race track or OTB venue, and again with some states enforcing strict lock down measures, horse betting has also been severely hindered.”
Phillip is cautiously optimistic of a bounce back soon.
“I can envisage a return of some professional sports in the coming 3 to 6 months. Maybe at a reduced capacity with no spectators, however, at least there will be some games to be wagered on. And it not need be professional sports within the US. We know of many professional sports which are gearing up to resume in countries around the world. There are many Americans who love sport, and given the lengthy drought of no sport to watch, any professional sport will do! Even AFL and Rugby League from Australia!”
The road map for sports betting seems to be a larger hurdle than that of casino games. Sport will need to be able to prove that they can run competitions with the protection of players and staff health. This is no easy feat, particularly with the cross country travel required by air and disparate lock down measures applied from State to State, and City to City.
The OverWatch League (OWL) begun several years ago to emulate the framework of professional sports such as the NBA. Professional OWL players in territorial teams would compete against each other in a regular season, culminating in playoffs to arrive with a season champion.
The participation and viewer rates has surpassed many expectations. But:
has E-Sports gambling been able to taken advantage of the demise of traditional sports betting?
Not really. Web traffic shows that the interest in e-sports gambling remains most the same as pre COVID19 days. It’s hard to draw conclusions as to why, however it could be considered that e-sports is fundamentally very different to traditional sports and therefore there is no transient factors.
It may also be that e-sports remains for the millenials with the older generations finding it much harder to be drawn to.
Again, we draw insights from Phillip Wong.
“We began a site several years ago, to assess the interest of e-sports wagering, in particular for OverWatch League betting. Though extremely popular among fans, there just wasn’t any excitement generated through wagering on the teams. The demographics are clearly different among e-sport fan followers and those of traditional sports. COVID19 will most likely draw more participation to e-sports, but I doubt that it will increase e-sports gambling.”
Poker in the past decade boomed in the US, with the creation professional tournaments resulting in celebrities, huge wins, and a strong TV following. In some US States you will find card rooms venues are legal offering poker tournaments.
These venues, similar to the land based casinos, have been suspended indefinitely, but there has not been the same transition to online poker, as seen with casino table games and slots.
Poker has different gaming characteristics, in that it requires reading opposing player(s) reactions and well as portraying and controlling own body indicators.
Online poker, obviously cannot show and allow for human body actions, and therefore the gaming becomes almost solely on poker gambling statistics. Unfortunately, online poker scams can involve poker bots being used to play, thus creating very little chance for a real player to beat.
Many are aware of the limitations of playing online poker. Online is often a great place to start learning poker, but it’s not translating to being a draw card for the more serious real money players.
Bingo is making a comeback! Once a game that was identified as an oldies, grannies game, is now revitalized by young women. The attraction of relaxing and socializing with a soft form of gambling, but also knowing that funds raised often are for charities, non profit and community groups is something that makes Bingo significantly different from other forms of gambling.
Unfortunatly, bingo parlors too have been shut down indefinitely due to the coronavirus, and are experiencing the same difficulties as land based casinos and card rooms.
Has there been a transition to online bingo?
Yes, there has been. Though not as large as online casinos, there have been more than online poker.
Bingo translates well to online, however the mode of socializing is very different to a bingo parlor. Millenials are of course adept with online chat, often using emoticons and other symbols to express feelings. Their ability to play online bingo with very good communication skills means it can be an extremely enjoyable game to play.
COVID19 has impacted many forms of gambling in the US, but with varying results. A transition of slots and casino table games can be seen from land based to online casinos, while sports betting has come crashing down. E-Sports gambling, which was insignificant pre COVID19 is expected to remain as is, while poker also seeing an increase online, through not as significant as slots and casino table games.