The COVID-19 pandemic has fundamentally changed society leaving no industry unaffected. For the betting industry, the effects have been particularly bad. Uncertainty has left industry experts in the U.S. uncertain whether fall sports will be played.
Although there are mixed messages about the viability of a fall season (especially regarding the NCAAF college season), the gambling industry is actively brainstorming how it will respond if the NFL and NCAA do not return in the fall. If the season is not played, this may cause smaller sportsbooks to close down their operations, while the larger sportsbook especially those with mobile applications are in the best position to survive.Read More »
Even within the gambling industry itself, the loss of the NFL and NCAAF will negatively affect other gambling activities. It drives in-person gambling at casinos, as bettors who place bets on games also spend money on slots and table games.
In response to the prospect of a fall without the NFL and NCAAF, the gambling industry has come up with creative ways to keep players interested in placing wagers. At the onset of the coronavirus pandemic in March, the industry posted some creative wager options, such as an over-under on the temperature, stock market indexes, politics, and reality television. However, these props are unlikely to generate sustained interest and keep the attention of the more sophisticated bettors.
Considering that Europe has performed much better in its response to COVID-19 offering increased props and contest games regarding European soccer could be one response to the loss of traditional markets. Additionally, continuing to offer and expanding props related to Madden e-Sports competitions and game simulations could help to offset the losses.
The European Soccer Betting Market
A viable option to replace the lost traffic in the fall would be to increase offerings and create contests related to European soccer. Soccer is a sport already a rapidly growing sport in the U.S. and interest will likely grow with the loss of more popular sports and the end of the baseball season. Many U.S. fans are already familiar with the Premier League and interest is growing in other leagues such as the Bundesliga and La Liga.
Another factor to consider is that Europe has controlled the COVID-19 pandemic much more effectively, which will decrease the uncertainty that leagues will be forced to halt operations. If the fall season is started and halted because of a wave in the pandemic, there could be negative effects in the gambling industry, especially in the futures markets. Additionally, another wave of the pandemic in the U.S. could also affect the NBA, making it another vulnerable fallback option. Sportsbooks should be prepared to capitalize and provide more props and contests related to European soccer leagues.
One way to capitalize on European soccer market is by offering more live in-play wagering options. In the U.K., in-play wagering constitutes up to half of all wagers on soccer matches. Live wagering is less common of a concept in the U.S. with many books being hesitant to adopt it. New Jersey mobile sportsbook applications have already seen rapid growth in overall traffic as a result of offering more live wagering options.
The Growth of Football Game Simulations and e-Sports
During the coronavirus pandemic, simulated games and e-sports competitions took off with both praise and criticism for its operations. The average total bet for a simulated game in April was around the average revenue brought in for a baseball game in early April.
One benefit of betting on simulations and e-Sports is that there was already an established market of bettors who were following the before the pandemic. Additionally, they could fill the void left by not being able to bet on NCAAF and the NFL. The gambling industry could look to capitalize on the newfound interest for the e-Sports market (as high as 54% increase reported by Luckbox) by offering more props and links to a live stream of the contests. This will also bring a new generation of sports bettors who grew up playing games such as the FIFA franchise and Madden into the industry.
The criticism has mostly come from bettors who have critiqued elements of simulations that they have described as unrealistic. There is fear from sportsbooks that even though the simulations are being run by third-party services, customers may begin to question the integrity of the simulations. The good thing is that it is hard to live bet in simulations, but the overall perception that the games are not fixed may be damaged over time.
e-Sports may be the strongest candidate to try and replace lost revenue and interest in sports gambling with the potential loss of football. According to the Wholesale Investor, the global e-Sports market will be valued at $17.2 billion by the end of this year. Unlike obscure betting markets such as Russian table tennis and Belarussian soccer, there is more information available regarding e-Sports teams and competitions. Since U.S. sportsbooks have more knowledge on e-Sports they may be able to release odds with more confidence and they may be more willing to add more props as a result.
While the gambling industry will be hurt by the loss of NCAAF and the NFL, European soccer and e-Sports offer avenues to recover lost revenue. They offer established markets and increased confidence in lines, making them viable replacement options.