The Impact of COVID-19 Pandemic on Global Gambling Stocks

Almost every industry has been affected by the COVID-19 pandemic and the global gambling industry has been hit hard, with casinos and other gambling venues closing and sports events postponed or canceled and lottery outlets suspended. Las Vegas, Macao, Atlantic City, and other major venues around the world closing down operations. Even the Indian sub-continent has been hit hard, with big city and riverboat gambling being halted.

Online gambling industry

One of the very few industries that have witnessed growth during the period of COVID-19 globally has been the online gambling industry. The lockdown that forced many to stay at home and who were then looking for some excitement and entertainment within those walls, were turning to online casino and gambling sites. More information on the actual effects of the pandemic on the global gambling market can be found summarized in this infographic provided by the research team at blackjackonlinecasinos.net.

Global Gambling Stocks

Researchers have estimated that around 51 per cent of the world's population currently enjoys some form of gambling. The challenge for the online gambling industry is that players demand the very best quality experience, which means companies are continuously working on new features and a vast number of options to stay ahead of the competition and to off-set the financial damage to land-based casinos in their portfolio caused by the COVID-19 pandemic.

Market research

According to ResearchAndMarkets.com's report released in April 2020 entitled Online Gambling Market Size, Share & Trends Analysis Report by Type (Sports Betting, Casinos, Poker, Bingo), by Device (Desktop, Mobile), by Region (North America, Europe, APAC, Latin America, MEA), and Segment Forecasts, 2020 - 2027, the global online gambling market size is expected to reach USD 127.3 billion by 2027, registering a CAGR of 11.5 per cent from 2020 to 2027.

A later report by Global Market Insights in September, on the global online gambling market covering the US, Canada, UK, Germany, France, Italy, Spain, South Asia, East Asia, South East Asia, Oceania, Mexico, Colombia, Argentina has forecast 16.5 per cent growth between 2020 and 2026, with a value projection in 2026 of USD160 billion, up from USD 55 billion in 2019.

Factors behind strong global gambling stocks

The strength of global gambling stocks is due to a number of factors that are not negatively impacted by the COVID-19 pandemic. The factors include the rapid adoption of digital currency in online gambling in North America and Europe. There is also an increase in the adoption of smartphones, which offers easy access to casino gaming, and particularly in Asia Pacific, there are a broader range of payment methods to open up gambling to more people. The freemium business model, which allows punts to try an online game for free before they spend their own cash, offers a flexibility that has attracted many new users to gambling sites. These factors will propel the online gambling market growth during the forecast period.

When it comes to growth in stocks, perhaps most significant is the growing legalisation for online gambling by several states in the US. In Mexico, the government is investing in gambling to benefit from gambling tax from online gambling and in Europe, an increase in the use of advanced technologies such as Augmented Reality (AR) and Virtual Reality (VR) in online gambling is also keeping gambling stocks strong during the COVID-19 pandemic.

Other impacts on global gambling stocks

It is worth bearing in mind that global gambling stocks will also be affected by mergers and acquisitions as factors outside of the pandemic make an impact. These include regulations in various countries particularly the planned review by the British government on the Gambling Act 2005 to bring it up-to-date with current markets, as well as potential new regulations in the US, France, Germany and Italy which could add to industry costs. Other factors that are challenging the industry are the globalisation and the barriers to new companies able to launch.

The future

Asia Pacific is expected to report the highest growth rate for three reasons. The first is that more people are using smartphones in the region, second, the region has a much younger population than the rest of the world, and the region has also legislated for online gambling. Europe is expected to continue to dominate global gambling stocks over the next few years. In the UK, online gambling has safe practices and stringent regulations laid down by the government via the UK Gambling Commission which gives it top rank as the safest global gambling stocks currently.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes