Member Insights: ‘We Could Well See Mergers And Acquisitions’ – How The Sports Betting Industry Has Been Affected By Covid-19
May 18, 2020
As the sports and betting industry starts the early days of its recovery from the coronavirus pandemic, with the first signs of live sport returning this past weekend, Paul Fox, CEO of Mayfair International Holdings, takes a look at how the global betting giants have been dealing without live sport…
There is no getting away from the fact that this is a difficult time for global businesses across all industries. The Covid-19 pandemic has seen some sectors grind to a halt, and while online gambling should survive in the short-term, revenues have been drastically reduced across the board.
In terms of just how much revenue has been lost, it greatly depends on each individual brand. Some companies are completely sportsbook focused and have been greatly affected, while those that are more casino-based will not suffer as much. Our portfolio tends to be fairly split between sportsbook and casino, but it’s clear that everyone is vulnerable in the current climate.
There’s no doubt that betting and gaming will remain synonymous with one another in the coming years. The younger adult demographic of fans fits in perfectly with the target market of both sectors.
The lack of live sport has had a major impact on the day-to-day operations of the majority of companies and revenue streams have been hit hard as a result. We’ve gone from a bumper summer featuring the Tokyo 2020 Olympic and Paralympic Games and UEFA EURO 2020 to a complete suspension of sporting events in some countries.
Plans are gradually being put in place for a return to elite level sport and that will provide a huge boost both for the morale of the general public, the betting operators that rely on that income stream and the teams and competitions who benefit from partnership income gaming companies provide.
With so little sport for fans to engage with, operators have had to be agile and innovate to survive. We’ve seen the emergence of virtual sports and esports during the pandemic from the ePremier League Invitational to Virtual F1.
There’s no doubt that betting and gaming will remain synonymous with one another in the coming years. The younger adult demographic of fans fits in perfectly with the target market of both sectors and, even before Covid-19, there was a clear move towards the growth of Esports. International gaming company LeTou – owned by Mayfair International Holdings – signed a collaborative partnership last year with Esports entertainment brand Fnatic and I expect many similar deals to be struck in the coming months and years.
We could well see a number of mergers and acquisitions as some of the smaller companies struggle to survive the difficult climate.
The betting industry as a whole will continue to suffer in the short-term and we could well see a number of mergers and acquisitions as some of the smaller companies struggle to survive the difficult climate.
One positive for brands is likely to be the reduction in sponsorship costs, with many commentators predicting that the era of mega broadcast deals and £100m+ transfers will come to an end.
Businesses are unlikely to spend big money without a clear and strategic return on investment and football clubs will be in a weaker position to negotiate with potential sponsors.
Every aspect of sport will return to a transformed landscape when competition begins again in earnest.
Only those brands with a robust business model will survive, but it is up to all stakeholders to work together to ensure that the ‘new normal’ results in a strong and positive sports industry for the world to enjoy.