Ninety percent reduction in sports wagering.
The German Sports Betting Association (DSWV) has revealed an 90% decrease in betting revenue due to the COVID-19 pandemic, causing significant challenges for the booming industry. High-profile events such as the European Football Championships and Olympic Games were postponed, leading to massive financial losses. What developments can we anticipate?
Hard Times for Bookmakers
In early February, the DSWV claimed record turnover in the German sports betting market. However, now the association faces a historical crisis. The global shutdown has resulted in a devastating 90% decline in revenue. "We are very concerned," DSWV President Mathias Dahms told the German Press Agency (DPA), "the business is almost non-existent."
Despite the flourishing nature of the industry, which raked in approximately 9.3 billion euros in stakes in 2019, the recent circumstances are proving a difficult challenge. All sporting events have been canceled, leading to a downturn for both traditional and online betting establishments. Operational costs remain a considerable risk, as technology requires constant maintenance.
Dahms, of the DSWV, also fears for the livelihoods of betting shops. While larger international companies might be cushioned by financial support or government aid, smaller businesses lack the necessary defense against the pandemic. In the UK, the inclusion of the British betting umbrella organization in a 350 billion pound rescue fund was rejected.
Restricted Betting Enthusiasts
Consumers of sports betting are also significantly affected by the predicament. British gambler Ersen Guven, a professional bettor who earns up to £6-7 million a month via betting exchanges with live betting, reported a shocking 80% drop in revenue. "This is ridiculous," Guven stated.
Currently, there is limited sports betting opportunities, with matches in the Belarusian league being the sole source of entertainment for desperate punters. These games command a significant value, surpassing one million euros. Such desperate measures highlight the desperation of bettors searching for something to wager on. Guven himself is reportedly wagering on Belarusian matches, though betting on scheduled friendlies is unwise due to the unusual results.
Interestingly, the Belarus Football League plans to continue running. President Alexander Lukashenko has rejected a pandemic-driven shutdown, stating, "It's better to die standing than live on your knees." However, the future of major sports leagues and their sponsors remains uncertain.
Pressure on Leagues and Sponsors
As sports leagues around the world cease operations, so does the betting industry. The European Football Championships and Olympic Games were postponed until 2021, rendering sponsorship partnerships a major financial concern. Betting operators are significant sponsors for these events, so enormous losses are expected.
Halle's third division club, Hallescher FC, exemplifies this issue. Its primary sponsor is Sunmaker, which is a sponsor for seven third-division clubs. The betting provider has already completed all commitments for the current season, but negotiations over compensation may drag on well past the crisis. This scenario is commonplace amongst clubs in Germany's top soccer league. It recently announced ghost matches without spectators from May, extending into the end of the year. The long-term repercussions - and the future of betting partnerships - remain undetermined.
On a contrasting note, Serie A, Italy's top soccer league, is limited by a current sponsorship ban during crises. The league requested the Italian government to reintroduce betting advertising in order to recoup lost revenue, with potential losses reaching up to 700 million euros due to the pandemic.
Escape Routes for Betting Providers
The sports and betting industry is currently confronting a sharp decline, manifested in declining stock values. GVC, for example, owner of bwin and Ladbrokes, saw its shares drop from 9 to 3.50 euros. Bet-at-home's stock prices plummeted from 40 to 18 euros. But how can betting providers temporarily escape their predicament?
Potential solutions could involve e-sports variations and virtual sports, such as virtual horse races. Swiss data protection company Sportradar has even announced a new product called "Simulated Reality." By utilizing artificial intelligence, sporting events could be made more tangible and real.
img src="https://source.unsplash.com/3xl/375x250/?football,soccer,sports,money"
The sports and betting industry is experiencing a severe downturn, as exemplified by the recent collapse in stock prices. In the face of the pandemic, traditional revenue streams have been blocked, forcing providers to explore alternative options. E-sports and virtual sports, when generated digitally, offer a potential escape route for industry players.
Meanwhile, ideas like these aren't a long-term replacement for sports. The gambling sector, which was once seen as recession-proof, is now facing a crisis during the Covid-19 pandemic. If the ball doesn't start rolling again from May, providers will need to think about other options to offer. Otherwise, their losses could increase significantly.
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Source: www.onlinecasinosdeutschland.com
