Research Firm: 2020 Global Gambling Revenue At 10-Year Low

Make no mistake about it, COVID-19 has decimated the gambling industry. Analysis from leading research firm H2 Gambling Capital indicates global gambling revenue will hit a ten-year low in 2020.

The latest estimates from H2 presented in iGaming Business put global gross gambling win at $363.8 billion in 2020. That’s a far cry from the $464.6 billion tallied in 2019 and a 23% reduction from H2’s pre-pandemic estimate of $472.6 billion.

Even though 2020 is shaping up to be the industry’s worst year since 2010, some notable positives are buried within H2’s numbers. Of course, there are also reasons for increased concern as we look ahead to 2021 and beyond.

Here are some of the key takeaways from the H2-iGB article.

Online Gambling Bucks the Trend

According to H2’s estimates, 18.6% of total revenue is expected to come through online channels in 2020. That’s up from 13.19% pre-pandemic, and the firm thinks online gambling’s share could trend even higher, perhaps as much as 20%.

Those numbers aren’t overly surprising, as online gambling revenues in the US were up across the board after the shuttering of land-based gambling venues.

More importantly, for online gambling firms, those increases have been sticky. Even after US land-based casinos began reopening (most in limited capacities), online revenues have not lost the gains they’ve made during the shutdowns.

That will likely cause jurisdictions worldwide with strong land-based gaming markets, including many US states, to reevaluate their attitude towards online gambling.

As H2 notes, the firm has downgraded Europe and North America by 18.7%, and Asia/Oceania by nearly 30%. The big difference between these geographic regions is the availability and popularity of online gambling.

That could be a driving force for more expansion, particularly online in the US and beyond. Of course, that money needs to be significant, or lawmakers are likely to focus on other revenue possibilities. Not to mention that COVID-19 shutdown many legislative sessions, leaving a lot of important business unfinished.

Can the Industry Bounce Back in 2021 and Beyond?

H2 forecasts healthy growth in 2021, but the estimate of $442 billion is well below 2019’s total and its original 2020 estimate.

There are likely a couple of reasons for pessimism.

First, COVID-19 is far from over. A second wave could wreak havoc and lead to more shutdowns or rollbacks of casino reopenings.

And even if things continue to improve, land-based properties around the globe are operating with restrictions, and many consumers are still cautious when it comes to crowds and travel. That’s unlikely to change until a vaccine is authorized and widely available.

Further, travel restrictions are still in place in many locales. So, even if people want to hop on a plane and visit Las Vegas, it’s increasingly difficult and involves jumping through several hoops.

As such, destinations like Macau have been hard hit, with revenues dropping in the neighborhood of 90% for several months. Las Vegas could be on the same trajectory as it tries to curtail rising cases. Thus far, the safety precautions in place haven’t slowed transmission, even at the casino properties going above and beyond state and city mandates.

As Always, It’s the Economy

One factor that could slow gaming’s recovery in 2021 and beyond is the broader economy. The impact of COVID-19 on the economy could take years to heal.

Gaming could suffer if lost jobs are permanent, governments continue to turn off the stimulus spigot, and COVID-19 lingers, causing travel restrictions, capacity limitations, and mini-shutdowns. As was the case following the 2008 recession, it takes time for the effects to trickle down to consumers and even longer for economies to recover. At the end of the day, the money people have to gamble in 2020 might not be there in 2021 and beyond.