H2 Gambling Capital expects the outbreak of the novel coronavirus (Covid-19) to lead to a decline of up to 8% in global gambling gross win in 2020, only the second time annual revenue will have fallen in 20 years.
As the total number of global Covid-19 cases hit 90,000, the industry data specialist noted the outbreak had already hit revenue in a number of key jurisdictions. The Chinese lottery market has already been affected, as has Singapore and Macau, where gambling revenue fell 87.8% to MOP3.10bn (£303.4m/€349.6m/$387.4m) in February.
The impact of Covid-19 is expected to be greater than the last major outbreak of an infectious disease from China, the Severe acute respiratory syndrome-related coronavirus (SARs).
This, between 2002 and 2003, did not have anywhere near the impact on the gambling industry, H2 noted, as China’s total gross win stood at $9bn at the time, or 3.5% of the global total. However, growth in mainland China, coupled with the deregulation of Macau, means that China and its autonomous regions generated $71bn of gross win, or 16% of the global total, in 2019.
With significant outbreaks also reported in Hong Kong, Italy, Japan, Malaysia and South Korea, H2 has also revised forecasts for those markets.
As such, it believes the best-case scenario is a year-on-year decline of around 1.0% to $452bn, effectively bringing the global gaming market down to 2018 levels. This represents a 4.8% drop from H2’s pre-Covid-19 forecast for the year, of $475bn.
This, iGB's principal data partner noted, does not include any downgrades to gambling gross win in other markets. Should other nations face a similar impact to the countries already affected, a further 3% could be wiped off the value of the global gambling market, resulting in gross win falling to between $430bn and $440bn, or 2017 levels.
However, while restrictions on movement could impact land-based performance, this could have a positive knock-on effect on the online gambling market. Should players shift online as a result of land-based shut-downs, igaming’s share of global gross win could rise from 13.4% to 14.7% in 2020.
H2 noted that this could easily beyond 15%, should the outbreak continue into the second quarter of the year. Land-based gross win, on the other hand, is expected to fall by 2.4% to around $386bn – down from an pre-outbreak forecast of $409bn, and potentially the second consecutive year of decline for the bricks and mortar industry.
Online gambling could still be affected by the cancellation of any major sports event, something that H2 said would have an impact across the board.