You're champing at the bit, counting days until international horse racing or a soccer championship, dreaming of it as if it were your major life event... But bang! And everything starts marching to the beat of a different drum – restraints, suspensions, cancellations...
Today, the world’s economy is undergoing a radical shake-up, and we have to look for other ways and directions in order to keep our heads above water. Almost all business areas around the globe have been dramatically affected by the current situation. And in this article, we would like to point out sports betting as the niche that’s suffering a lot.
What is happening to sports betting today?
Suspensions and cancellations
Almost half of all major sports events that were scheduled for 2020 won't be held. A lot of significant championships have been already called off or suspended, among them, UEFA Champions League and Europa League matches, FIFA Asian World Cup matches, Africa Cup of Nations, Amsterdam, Paris and Barcelona marathons, the Dubai World Cup, the 146th running of the Kentucky Derby, Formula One; the NBA, NHL, MLB, and Premier League seasons are on hold, and many more. Even the 2020 Olympics in Tokyo are postponed until 2021. To be in the loop, check out the full list of canceled and suspended sports events here
Global prohibitions on mass events have left the sporting calendar almost bare, halting the whole sports industry, and therefore, putting the sports gambling field in jeopardy. Let’s take a glance at the latest unpromising stats, they can draw a clear picture. The American Gaming Association reports that betting sites are predicted to lose $43.5 billion in total revenue. British bookmakers have already lost €2.2 billion. And according to H2 Gambling Capital, the gambling market will face an 8% decline in annual revenue. Cancelation of NCAA basketball alone was evaluated as a $140 million loss. However, with the current uncertainty, it's quite difficult to provide clear and exact estimations.
With major international sports events canceled and postponed indefinitely, the folks involved in sports gambling must be scratching their heads and wondering how to get their ducks in a row.
Although it may seem that the sports betting vertical is almost dead, and the only right decision here is to stop working with the niche, it might be a big mistake. Bookmakers are generating new ideas to keep their businesses afloat, therefore new industry trends are emerging and opening new opportunities.
In attempts to stay afloat
Having lost their main meal ticket, betting businesses find themselves in a crummy situation. They can't just shut the doors and put all business activities on the back burner. They have to live on their wits to find other possible lucrative ways to stay afloat.
Relying on government support
It seems like even governments are trying to help the sports betting industry. For example, at the end of March, the Russian government commission included one of the largest bookmakers into the list of backbone organizations that might claim financial support accordingly. The government commented that the operator got on the list because of its weight in terms of being a large employer and taxpayer with great revenue. However, later the Ministry of Finance announced that the company was excluded from the updated list explaining that gaming businesses and companies with offshore investment funds can't be supported at the country level.
In the UK, sports betting businesses with a decrease of up to 60% trade, called for a 'rescue package' from the country. And at the end of March, the UK government offered a financial package to support businesses in the entertainment industry with regards to providing assistance to employees.
The US government also didn't leave the industry aside. Thus, recently Washington authorities signed a bill legalizing sports betting in the state.
Anyway, betting businesses shouldn't reckon on governments' support, as they have more important issues to focus on today. And such help, if any, can be meaningful only for employees.
Focusing on small-scale events
What about choosing the line of least resistance? You can join in with betting providers, looking for live sporting events that are still being held and encourage clients to gamble on them. Such small-scale events that were previously in the shade, as Russian table tennis, Russian Hockey, Belarus Premier League do really attract gamblers' interest today. Although these events are not probably equal to the betting volume, they might be significant stopgap solutions for now. Sports betting is not absolutely dead so far, 1xBet and Fonbet clearly demonstrate gamblers’ interest in current local tournaments and matches.
Betting on something else
Business is not about striking the same path, a successful business is about pushing the boundaries and considering various directions, especially being in crisis. For instance, today some bookmakers go balls out to generate creative ideas about taking bets on whatever possible. Thus, American operator FanDuel applied for permission to accept bets on the US presidential election. The world's largest bookmaker, Betfair, has already started taking such bets.
Bovada, Costa Rica-based online sportsbook, started to take bets on maximum temperatures in various cities. And no one would dare say that it’s something stupid or a kind of that, people do gamble and take it seriously!
Looking for an equivalent replacement
Sportsbooks don't want to settle for less, trying to find a more profitable direction for their businesses. All the world has moved online, why not try turn sports betting into e-sports betting too?
Not least because overall interest in cybersports has recently grown, which can be demonstrated by the increase in the number of gamers and viewers. For instance, LoL Continental League was watched online by over 80K people. Shooter games see 40% boost in players since December, more than 70K people participated in Warface tournaments for one month. Viewership on Twitch is up 31% in March. This couldn't but lead to e-sports betting increase.
Since the 2000s, with Counter-Strike and Warcraft tournaments, cybersport betting has developed into a whole industry. And today, you can select not only from Dota, Warcraft, or Counter-Strike, but also from a good deal more, such as Quake, Overwatch, Point Blank, Mortal Kombat, League of Legends, and so on. Since March, the interest in cybersport has gone sky-high. The Russian League of Bets reported a 10-fold rise in the number of cybersport bets, based on the betting firm's observations, today, Counter-Strike and Dota 2 hold the top spot. However, Narus Advisors and EsportsBets report that today the most popular games among e-sports fans are League of Legends, Dota 2, CS:GO, StarCraft 2, with League of Legends taking a leading position.
E-sports betting is a rapidly growing industry, and the audience is increasing respectively, at such a rate, the frequent viewers' number is projected to reach 300 million by 2023.
Cybersports gambling can be considered as one of the most lucrative verticals. Top-ranked world's e-sport betting sites like 888 Sport, Bet365, BetOnline, Betfair, Betway Esports, Arcanebet, etc. are bringing in big revenue for the whole industry. Marketers predict that in 2020 the cybersport betting industry will grow three-fold in comparison with the past two years. The latest estimates of the e-sports market revenue worldwide can draw a clear picture. (https://www.statista.com/statistics/490358/esports-revenue-worldwide-by-segment/ )
And when it comes to e-sports betting, we are talking about heaps of money. According to research by NJGames.org, the total amount bet on e-sports competitions is expected to hit $12.9 billion by 2020. As reported by Statista, the amounts wagered worldwide have significantly raised for recent years and will hit $23.5 billion in 2020.
No doubt, the current crisis has done its part, moving the needle even much further. Take a look at the frequency of betting on e-sports in late 2019 and since the second quarter of 2020, just to put that in context.
Dealing with e-sports, bookmakers can gain even more profits and have more possibilities, as not only do they take bets, but they also host tournaments. This infers that with the capability to stream championships on websites, they don't have all these additional expenses related to buying the rights for broadcasting. The prize fund, internet, and advertising are all it takes.
It may seem that cybersport betting can be the only meaningful alternative. But will it really fill the void and help bookmakers survive? It's a big question... Seeking the truth, we decided to ask an expert opinion about it. Folks from a well-known betting company share their thoughts, replying to our questions, you can read the interview here.
In wrapping up, uncertainty still remains. There's no timeline or exact rescheduling as to when live sports events will be resumed, and there's no guarantee that everything will get back on track. Betting companies should do their best in order to save their businesses and not bury the industry.
Although cybersport betting is witnessing significant growth, no one can assert that this trend will proceed when the sports event prohibitions end. One thing is sure, during traditional sports betting fall, virtual sports can be a large source of gaining profit for bookmakers, inventing new industry trends, and that way, opening up the potential for dealing with this vertical.