The coronavirus pandemic has wrought havoc across the globe, both in terms of citizens’ health and the wider socio-economic climate. At the last count, more than 11.8 million cases have been reported globally, while in excess of 543,000 deaths have occurred as a result.
While it’s fair to say that some businesses and marketplaces have also been decimated by coronavirus, others have achieved tremendous success and actually seen demand for their products and services increase since February.
The online casino industry offers a relevant case in point, with the enforced lockdown enabling citizens to spend more time than ever wagering online.
But how exactly have casinos fared? Which facets of the marketplace performed particularly well? Has the pandemic been an economic disaster for the industry?
These are questions which all require careful analysis.
The impact of Covid-19 on virtual casinos
It could be argued that the iGaming market in the UK endured a challenging 2019, against the backdrop of constantly changing regulatory and legislative climate.
This comes against a backdrop of over 600,000 jobs being lost in the UK during the Coronavirus lockdown.
Despite this, iGaming accounted for an estimated 37% of the gambling industry’s total GGY in the six months ending September 2019, while it also generated a healthy $5.3 billion during the same period.
From a global perspective, the rise of growth markets in nations such as Sweden, Poland, Germany and North America boosted the gambling market’s cumulative GGY to $58.9 billion at the end of 2019. However, the coronavirus pandemic is set to underpin a compound annual growth rate (CAGR) of 13.2% in 2020, with this noticeably higher than the previous five-year period.
As a result of this, the global iGaming market is set to achieve a value of $66.7 billion this year, which is higher than the initial forecast posted at the beginning of 2020.
Of course, some may argue that this market was already poised to enjoy double-digit growth in 2020, but there’s plenty of evidence to support the notion that coronavirus has accelerated this trend.
For example, it’s anticipated that the market will reach $92.9 billion by the year 2023, growing at an impressive but relatively modest CAGR of 11.64%.
Of course, it hasn’t all been good news for iGaming brands and online casinos, especially those that also offer a sports betting vertical to its customers.
After all, this market has been all but wiped out over the course of the last three months, during which time most major sporting events and global tournaments have been either suspended or cancelled.
While popular betting markets such as the Premier League have tentatively resumed of late, this has delivered a significant dent to company revenues and impacted on Q2 financials across the board.
Even this challenge has not been as impactful as some may have feared, however, with operators quick to adapt their business models and fill the sudden void with more creative verticals.
More specifically, we’ve seen the rise of virtual sports betting of late, with popular events such as the ‘Virtual Grand National’ delivering high volume search results online and a large number of competitive bets.
Potters Corner won this televised event in April, with the 18/1 shot beating Tiger Roll (the 5/1) favourite and providing a pleasant surprise for those who backed him.
Of course, virtual sports is now a fast-growing betting niche, and one that has seen its popularity grow exponentially during the recent pandemic. Along with esports, which is now valued at more than $1 billion globally and will peak at $1.6 billion in 2023, this has also filled the traditional sports betting void and helped firms to minimise any lost revenues.
The beneficiaries of this growth: Microgaming and other software providers
Aside from the operators themselves, software developers are also benefiting from this accelerated growth.
This is particularly true in the case of software houses such as Microgaming, which boast a vast games’ library in excess of 800 titles. Suppliers of this magnitude are also constantly looking to expand their selection of games, particularly in a climate of high-demand where new demographics may be looking to wager online.
These entities are also working tirelessly to collaborate in a bid to make new and innovative games that can actively engage new players, ensuring that they continue to play and wager even as lockdown measures are being eased and the pandemic comes to an end.
This is particularly true in the slot game niche, which continues to account for an estimated two-thirds of the iGaming GGY in the UK. Indeed, Microgaming slot games are widely seen as this industry’s gold standard in this regard. This has no doubted put them in a great position in an industry facing the twin problems of a legislation crackdown and a global pandemic.
As a result, this is key to the appeal of casinos and their ability to target casual players, and this has proved crucial during the coronavirus pandemic.