The ongoing threat of the COVID-19 pandemic that is still being felt worldwide has led to many countries taking drastic action. Some have completely locked down, others are working on more of a tier system, and there are those that don’t seem to have much change on the horizon. However, when it comes to the United Kingdom, a second lockdown has now been imposed for a one-month timeframe. The question is, how will this affect land-based gambling stores throughout the country? The first lockdown had a big enough impact on them, so what will the second one do to it when it has barely recovered from that?
What sort of losses will the industry face? And how will that have an impact on online business? Furthermore, can retail stores and land-based casinos really recover such huge losses? What does the future hold? We’ll be looking at all of these questions and seeing exactly how the gambling sector can cope with lockdown 2.0. Not only that, but we’ll take a look at how online betting is expected to go through another boom, thanks to more people being asked to remain indoors for the four weeks.
What Does Lockdown 2.0 Mean For Business?
Everyone in the UK has been pretty much hanging on to the words of Prime Minister Boris Johnson, who has stated time and time again that the intent is to try and get the spread of the virus under control. Of course, that’s not something that he as one man is able to control, and this has led to some individuals not following the rules. The threat of coronavirus is still at large, and with the results of the first lockdown earlier in the year somewhat proving to drive infection rates down, the PM has opted for a second course of action in the same vein.
However, this second lockdown isn’t being imposed across the United Kingdom, but solely on England. The countries of Scotland, Wales and Northern Ireland have their own ministers doing their bidding for them. Johnson’s restrictions will not affect what has been introduced in those other three locations.
The tougher COVID-19 restrictions that are set to come into force on November 5, will see various measures introduced. There will be strict curbs on travel set in place, and the closure of pubs and restaurants will also take hold. Johnson admitted that his three-tier system, introduced on October 12, has not been effective in stemming the spread of the virus. Instead, numbers have continued to rise, and the PM told a Downing Street press conference on Saturday that new limits would instead be brought into effect.
While further provision will be introduced to help businesses through the coming month, and the furlough scheme will be reinstated at the same time to give workers 80% of their wages while their place of business is closed, what does this mean for the gambling scene?
In the announcement made on Saturday, Johnson stated that all non-essential retail outlets would be closed, as would gyms and hairdressers, as well as all pubs and restaurants. Takeaways will remain open for the delivery of food, but people will be banned from mixing in others’ homes. All travel in and out of the country, except for work purposes, will be stopped, but schools, nurseries, playgrounds and universities will remain in operation. Similar moves have been made in Germany and France recently as well.
Betting shops, bingo halls and casinos will be closed for the one-month period, though. This puts retail stores, such as Ladbrokes, William Hill, Coral and various others back into the same position that they were during the first UK lockdown. So, how can they possibly make it through another period of closure?
Long-Term Effects of Lockdown 2.0
Following the announcement by the Prime Minister, GVC Holdings, which is responsible for the Ladbrokes brand, stated that the second lockdown would cost them around £37 million. GVC, which is one of the FTSE100 companies, issued its market update on the impact that lockdown 2.0 will have on revenue due to the closure of its Ladbrokes retail shops.
It’s not just England that GVC Holdings operates in though, as it possesses Eurobet Italia and Ladbrokes Belgium subsidiaries, which are also likely to be strained by their respective country lockdowns. Italy has entered into its own lockdown, which is expected to continue until November 24, while Belgium has closed non-essential shops until December 13. Combining the expected £10 million loss from those subsidiaries with the closure of shops in England for one month, and GVC isn’t looking towards a healthy end of the autumn season.
In the same announcement by GVC, it stated that if Wales and Scotland opt to follow in the footsteps of England and introduce lockdown measures, this would likely cost an extra £6 million on top, meaning that total retail losses of £43 million could be experienced. That being said, GVC has stated that it expects a full-year profit of £770 – £790 million for 2020, thanks to the expansion of its online options across all markets. The company has already confirmed that it will close 450 of its retail betting shops across the UK, which was announced as part of its interim statement. This, it said, was due to the government’s decision to reduce maximum wagers on fixed odds betting terminals to £2 recently.
Those figures are just for one single company as well, so imagine the loss that will be felt throughout those companies that have land-based establishments in England. We’re not only talking about betting shops either, but casinos and bingo halls, which bring their own fair share of customers in on a regular basis. With their closure, an even bigger impact will be felt for the 4-week period, which current Minister for the Cabinet Office Michael Gove said could go on for a longer time period, too.
Not All Doom and Gloom, as Sports Events Continue
Something that had to stop during the first lockdown but will not be forced to close during the second coming of such is professional sports events. This means that not only will people be able to continue watching football matches on television, but online betting on the games will be able to continue taking place as well. Naturally, this will likely be somewhat of a saving grace for companies like Ladbrokes and Paddy Power, which will have to close their retail stores down for the time being. With these companies also having online sportsbooks, bettors can still place their bets on their favoured sporting events and potentially win this way.
This means that online sportsbooks will be able to provide their members with access to odds on a variety of sporting events and markets. Combining that with the boom that was experienced by online casinos, bingo halls, poker rooms and so on during the first lockdown, and there is somewhat of a saving grace on the horizon. However, will that be enough to stop their retail and land-based counterparts from going under? After all, with GVC predicting a loss of at least £37 million from the month-long closure of such, that’s a lot of money for a company to be losing out on.
It’s only natural that online operations will continue to flourish, though. With land-based venues closing, the online sites remain as the sole route for bettors to take to satisfy their gaming needs. The first lockdown saw many people taking to online gambling options, and while this may not have been in place of visiting retail outlets for such activities, it certainly couldn’t have been something going against online betting. Of course, the fact that sporting events were reduced around the world at that time didn’t help sports betting sites in any way. That being said, it did lead to people engaging in betting on sports that they hadn’t sought out before. This included Belarusian football, basketball in Tajikistan and a variety of eSports events.
Yet, could a potential increase in online gambling be problematic for the UK? After all, people were rallying against such operations before COVID-19 hit, claiming that the cases of gambling addiction in the country were heavily on the rise. This led to the government and the UK Gambling Commission making certain adjustments to reorganise the gambling industry and tackle the problem. How will the second lockdown affect such measures and is the Commission intending to introduce any new rules so as to try and curb this?
What Will The UKGC Do For The Lockdown 2.0 Period?
While nothing has really been stated by the Gambling Commission yet with regard to the second lockdown being introduced in England, potentially, rules could be enforced as they were during the first one. This saw the Commission introduce tighter measures so as to protect consumers while they were being kept at home.
The new guidance for online operators to take heed of was introduced following the publication of evidence that some gamblers may have been at risk of greater harm during lockdown. The guidance made clear that operators should prevent reverse withdrawals for customers, cease to offer bonuses or promotions to customers displaying indicators of harm and be sure to interact with players who have been accessing online gambling for more than an hour. Furthermore, reviews of new customer thresholds and triggers were to be introduced, the conduction of affordability assessments and the implementation of processes to ensure continual monitoring of customer bases, were noted.
Online operators were expected to make changes so that they could adhere to those guidelines as soon as possible. And potentially, such measures could be repeated for the second lockdown period. However, the Commission also released data relating to July 2020, when COVID-19 lockdown restrictions were eased. That data reflected results from March, April, May, June and July, covering both online and offline gambling.
According to that data, July saw a slight month-on-month decline in the amount spent by consumers at online gambling sites, although this amount remained higher than it was pre-lockdown. The thought process behind this was that there was much more demand for sports betting on popular events once lockdown ended. High street betting shops were also set to re-open by July 4, and this saw the number of online slots sessions going beyond 1 hour decrease by 2% towards the end of that month.
Furthermore, the Commission stated that during lockdown, there wasn’t really a dramatic shift in the number of people participating in online gambling of any type. Nor was there such a huge change in the amount of time and money that people were spending on online gambling sites. At the same time, it mentioned that new registrations during that first lockdown were quite minimal in themselves. With this in mind, would the Commission really have any need to impose certain new rules and guidelines when it comes to online gambling operations during lockdown 2.0?
A Final Estimation
Some people within the betting industry have welcomed the decision to enter into another lockdown. For example, the Betting & Gaming Council chief executive Michael Dugher said that it was a good decision. However, he also made some suggestions for the government when it comes to the end of the second lockdown.
Dugher said that one the second lockdown ends, it’s important that betting shops:
“are allowed to open safely along with other non-essential retail, as they were in June”. He mentioned that casinos have the best anti-COVID-19 measures in operation “anywhere in hospitality and entertainment”, and that they should also be allowed to re-open at the same time. Dugher finished off by saying that the government needs to realise that “a healthy betting industry is vital to the funding of sport, and that betting shops in particular are critical to the financing of horse racing”.
Whether or not there will be a large-scale re-opening of all non-essential establishments after the one-month period is up remains to be seen. It also remains to be seen as to just how much of an impact it will have on the industry. Retail stores will always suffer in these circumstances, but how often can they be forced into closure before they have to close their doors permanently? And that’s something relative to all retail shops, not just those associated with the betting industry.