Could 2020 Be the Year for Online Casinos?

The global casino industry, which thrives on tourism and large groups of people in close proximity, has been hit hard by the COVID-19 crisis. The first 4 months of 2020 could be the worst on record for Macau’s casino operators, with an estimated 95% drop in gross gaming revenue (GGR). The S&P 500 casinos and gaming index have also lost 51% so far in 2020.

Amidst this gloom, a new breed of casino gaming could emerge as the winner: the online gaming market.

Why the Sudden Interest in Online Casinos?

With the novel coronavirus outbreak having led to massive lockdowns across cities and confined millions of people to their homes, the world seems to be looking for new sources of entertainment to cope with the ongoing stress of a pandemic. Physical sports are also suffering, which is why several companies are now focusing on online gaming to revive sales. For example, boxing is hugely popular, and while real-life fights have been postponed, companies are providing online fights to engage customers.

But, there is now a different and huge fan base for online casinos, with operators of virtual games like Blackjack and Roulette receiving a boost from the lockdowns. For instance, the UK seems really into online casinos right now, amidst the lockdown. Britain, as we know, has always been a huge base for casino players, and the casino industry is a huge source of income for the country.

888 Holdings Plc, one of the world’s most popular online casino operators, recently reported a surge in customer activities in its casino and poker operations, which account for a majority of the company’s revenue. The company’s stock rose 38% on March 24, 2020.

The Online Casino Industry

Driven by the internet and cloud technology, the online casino industry is growing worldwide. Before that, people who wanted to play a game of Roulette or Blackjack had to visit a physical casino. However, modern technology now allows players to enjoy these games night after night, without leaving the safety of their homes.

This is becoming an intensely competitive industry, as companies are enticing players with attractive cash prizes and welcome bonuses. Japan has been at the forefront of this race, with a huge online casino industry that is expected to generate $8 billion per year.

What About the Casino Resort Companies?

Casino resort companies have temporarily closed business to help their governments promote social distancing. Companies like Wynn Resorts and MGM Resorts International are doing their bit to contain the virus and keep their employees and customers safe.

Macau’s closure deserves a special mention here. The casinos closed in mid-February 2020, some implementing strict guidelines, such as a maximum of four players per baccarat table, versus the usual seven. This has to be applauded, considering that casino revenues account for 86% of Macau’s income and the industry employs 58K of the region’s 640K residents.  Macau has implemented many lessons learned from the 2002 SARS epidemic.

Casino resorts might be battered but not out of the game. Up to March 9, 2020, 38 of the 41 casinos in Macau had reopened, with 46% of the 6,739 tables having resumed operations. As the world slowly limps back to normalcy, this industry could start recovering, maybe as early as 2021.