The global COVID-19 pandemic has ravaged many industries in all countries, with gambling being one of the most affected by this novel virus. Despite projections that this sector will quickly get back on its feet, operators are now reporting numbers that suggest the opposite.
In August of last year, William Hill announced that it would not reopen more than one hundred of its betting shops in the UK, which closed due to government-issued lockdowns. It also recently stated that its pre-tax profits fell by 91% in 2020 and that other UK operators are facing similar struggles, as all of them worry about latent demand in a post-pandemic world.
One positive occurrence of the events of 2020 concerning sports betting is that they accelerated the inevitable switch from land-based to digital wagering. Online sportsbooks offer significantly better odds and far more convenience, things that appeal to the modern bettor. GVC’s (Ladbrokes Coral) profits may have plummeted by 74% following, but their online sports revenues went up 5%, and their gaming ones jumped by 19%. That said, what does this mean for betting shops? Do they stand a chance of getting through the pandemic, or should they step aside and make way for digital sportsbooks to take over?
The government implements a £5 billion recovery plan
In early March, UK Chancellor Rishi Sunak announced the 2021 budget. In his statement, he pointed out that Britain’s economy has shrunk by 10% and that over 700,000 people had lost their jobs since March of last year. Nevertheless, he and others in crucial positions remain optimistic that the UK will get through this crisis and grow stronger. That is why they have announced more than £280 billion in support grants.
The UK’s gambling industry will benefit from this support via an aid plan worth £5 billion. Its goal is to help high-street businesses recover. Under the new budget, non-essential retail stores are eligible for cash grants of up to £6,000, while those that remained closed due to the lockdowns can apply for support of £18,000 per venue. UK’s Betting & Gaming Council warmly greeted this initiative, stating that they welcome any help due to the sector’s revenues dropping so severely.
How can betting shops stay in business?
According to Maxim Kiryukhin, chairman of Russian bookie – Fonbet, there are two things that operators must do to stay afloat. First, switching to the digital side of things is a necessity, not an option. Around 40% of Fonbet’s brick-and-mortar customers made zero bets during the pandemic, and only 15% of them laid wagers with internet bookies. Thus, operators must find ways to entice and help their customers switch over to mobile betting.
Stats also show that high-end clientele is more willing to visit a physical location to pursue this pastime. Therefore, operators must focus on creating exclusive privileges for VIP players. That includes sectioning off areas of their shops where only they can sit and enjoy extra perks. If brands do these two things, their chances of survival drastically improve.