By Yash Khushalani
The global sports betting market was valued at approximately US $104.3 billion in 2017 and is expected to reach US $155.49 billion by 2024. Although it is widely viewed as being a root cause of gambling-related problems, there are many positive aspects to the industry.
This industry delivers powerful economic benefits by generating employment, contributing to government revenue, and encouraging improvements in technology. With the coronavirus pandemic bringing nearly all live sports to a halt, bettors are trying to adapt as best they can during this troublesome situation.
Many are getting desperate when seeking to place a wager, some even willing to gamble their money on coronavirus statistics. Bettors are also interested in wagering money on the weather, current events, political elections, and even competitive eating. As seen in the graph, 41% of regular sports bettors are willing to put their money on coronavirus statistics and political elections.
The current situation for gambling companies
Despite the lack of sporting fixtures, people who gamble regularly are still doing so just as often during the lockdown. Despite this, gambling companies are still projected to take significant hits due to the unprecedented shutdown of global sports. Owners of gambling brands Paddy Power, Ladbrokes, Betfair and William Hill have stated that their earnings will be severely affected due to the virus which has hammered shares across the sector.
Flutter Entertainment Plc is a bookmaking holding company that operates the Paddy Power and Betfair brands. If the sporting world remains idle until the end of August, these brands will face a 90 to 110 million pound impact on their annual earnings. Similarly, the owners of Ladbrokes stated their full-year earnings may decrease by 130-150 million pounds due to fewer sporting fixtures, while William Hill is also prepared for a 100-110 million pounds hit on their core earnings.
Flutter Entertainment generated roughly 78% of its revenue from bets placed on sporting event across the globe in 2019, while sports accounted for 53% of William Hill’s revenue and approximately 45% of revenue for Ladbrokes.
How can sports betting affect the economy?
In countries such as the US, sports betting has not yet been legalised in certain states. Substantial research has been conducted and according to a study carried out by Oxford Economics, sports betting has the potential to boost economic growth, create jobs, and increase tax revenues in the US.
Legalising sports betting could potentially generate an estimated US $21.9 billion to US $26.6 billion in total economic impact. It is expected to contribute between US $11.6 billion and US $14.2 billion to U.S. Gross Domestic Product and produce between 125,000 and 152,000 jobs which would be paying between US $6.0 billion and US $7.5 billion in total wages.
Much-needed tax revenues will also be generated for communities if sports betting is regulated and taxed, with an estimated US $4.8 billion to US $5.3 billion for federal, state, and local tax revenues. This money can be used to fund vital public purposes such as education, healthcare, and law enforcement, which would be extremely helpful during trying times.
Although the world is going through a tough phase with the coronavirus pandemic, the global sports betting market are still forecasting incredible growth between 2020 to 2024. It seems that even more people will be ready to place a wager on their favourite sports teams in the future.
Sources: Business Insider, Statista, Business Wire, Reuters
The authors of this publication are not qualified to provide financial or investment advice and as such the content provided should not be construed in this manner. All information is intended purely for educational purposes and is provided for the personal interest of UNIT members. The opinions expressed within the article do not reflect those of UNIT as an organisation, its partners or its sponsors.