IT COMES as no surprise that COVID-19 lockdowns have taken their toll on bookmakers, but the impact William Hill reported this month was worse than many expected.
The British bookmaker, one of the biggest in the world, will be closing 119 stores across the UK, Ireland and the Isle of Man. These are stores which remained temporarily closed during lockdowns, and which will not reopen again during this period of eased restrictions.
Despite a £347.7 million loss reported in the first six months of 2020 compared to the same period in 2019, William Hill claims the company will recover, and even returned a £32 million stimulus package to the UK government. Investors, meanwhile, have been relieved to find William Hill climb nine percent on the London Stock Exchange on Wednesday the 5th, and another 2.5 percent the Thursday thereafter.
How exactly has William Hill survived the uncompromising lockdowns in those markets upon which it relies the most; the UK, the British Isles and Ireland? A financial statement from the company explains; “Our digital businesses have delivered good performances with new launches online and accelerated product development in the US.” The company’s partner, Caesars Entertainment, has merged with Eldorado Resorts and subsequently given William Hill access to fourteen states, strengthening their physical and online presence across the US.
The bookmakers’ securement of new verticals online and in new markets has seen the company recover from the financial impact of COVID-19 better than many other prominent betting brands in Ireland. Other household names, including PaddyPower and Ladbrokes, have invested heavily in their online offering since March this year, developing their online products in an attempt to compensate for the revenue loss caused by a complete absence of in-store pundits. With sports events cancelled all across Ireland and the UK, however, there have been a lack of sports on which to place bets - possibly leading some pundits to turn to online casinos.
The Response of Irish Bookies
Some Irish bookmakers have responded by quickly developing new and improved welcoming offers and membership perks, as a means of convincing local bookmaker devotees to take their bets online during lockdown. A spokesperson from the sports betting website, Max Free Bets, explains that the competition between online bookmakers is fiercer than ever, and brands’ readiness to welcome new players and stand out from the masses has proven critical since COVID-19 lockdowns:
“The deciding factor in the financial recovery of bookmakers, and casinos alike, will be the sophistication of their online offering. User-friendliness, membership perks, data security and state-of-the-art graphics contribute toward a positive online sports betting experience, but those bookmakers that have invested too little in their online presence, and relied instead on their physical venues, have found themselves facing the biggest challenges during lockdown. Few industries will remain unchanged from the impact of COVID-19, and the sports betting industry will certainly evolve in long-lasting ways as a consequence of the pandemic. The importance of a reliable online presence, and the shift in how bookmakers subsequently invest their money, will be one of the most significant long-term impacts.”
Horse Racing and Sports Betting Markets
The Irish bookmaker PaddyPower has tackled the betting limitations caused by cancelled sports events by promoting a variety of non-sports betting. Political betting, whereby an individual will bet on the outcome of an election or referendum, has grown in popularity not only in light of the currently tumultuous political climate, but because betting brands like PaddyPower have successfully conveyed political odds and predictions as an enjoyable alternative to traditional sports betting. Betting on the performance of stocks has also seen renewed interest, which may be an understandable development in light of COVID-19’s dramatic impact on the economy and stock markets.
Horse racing has been permitted since the end of June, which is around the same time bookmakers received permission to open physical locations across Ireland. Conditions include a limit on customers relative to the physical space of the store, and adherence to rigid hygiene measures typical for all newly re-opened businesses. A general sense of bitterness has been felt amongst many of the smaller bookies, who - when closing their locations in mid-March - were led to believe the closure would last for only two weeks.
Confusion around reopening guidance further heightened the sense of exasperation among Irish betting firms. A reported 800 bookmakers reopened their venues on the 15th of June, believing they were complying with the Irish government’s guidelines. However, within twenty-four hours, these businesses were instructed to once again close their doors, as they received word that betting shops were not included in the list of businesses permitted to reopen on the 15th June.
The Irish Bookmakers Association had, according to reports, mistakenly communicated that reopening would be permitted on this date. After the government made clear betting was not included amongst those sectors in the so-called Phase Two Coronavirus national plan, an emergency IBA meeting was called, and compliance guidance for betting shops was officially revised on the 16th June - much to the disappointment and confusion of those 800 newly re-opened and re-closed stores.
Sharon Byrne, chief executive of the Irish Bookmakers Association, stated; “We’re very surprised. We’re not like concerts or theatres. We’re small retail with low numbers of staff. We have very strict procedures in place. There is definite social distancing. We are absolutely compliant.”
The Irish government confirmed shortly thereafter that bookmakers would be allowed to reopen their venues on the 29th of June - a relief to many small betting shops, but too late a date for those that suffered the worst economic impact. With many smaller bookmakers bankrupt or on the verge of bankruptcy, the opportunity has opened for the top companies to seize upon newly emerged gaps in the market and solidify their monopoly in the fiercely competitive sports betting industry.