Gambling revenue has declined in B.C. during the COVID-19 pandemic, but with reopened casinos and an expansion in betting options, the sector is poised to rebound.
On August 27, Ottawa started allowing the British Columbia Lottery Corp. (BCLC) and other provinces’ gambling corporations to accept bets on single sporting events. The previous practice was that all punters must bet on multiple events as part of the same bet.
BCLC told BIV in an email that it expects that the change to accept single-game bets will help it increase its sports-betting business, which is worth $125 million to $175 million after the cost of prizes is deducted.
British Columbians spent more than $2.5 billion on legal gambling in the year before the COVID-19 pandemic descended. Of that, $1.347 billion was profit – all of which went straight into provincial government coffers to help pay for services such as health care and education.
A provincial health order forced casinos to close for the final 16 days of that 2019-20 fiscal year, as a way to limit the spread of COVID-19. That closure, and many lottery-ticket retailers’ decision to temporarily halt sales, prompted what then-board-chairman Peter Kappel called a “significant negative impact” on BCLC’s 2019-20 fiscal year.
The Crown corporation’s 2020-21 service plan noted that it expected the profit that it sends to Victoria would decline by more than 70%, to $394 million in 2020-21. That profit would then rise to $840 million in 2021-22 and to $1.31 billion in 2023-24.
With a struggling BCLC wielding a heavy blow to provincial coffers at a time when Victoria is racking up record deficits, the federal government’s legal change is well timed.
BCLC’s hope is that some money that gamblers had wagered on unregulated foreign-based gambling websites will come home and be spent on BCLC’s PlayNow.com platform.
“We’re excited to soon provide our players these new offerings on PlayNow.com, which is B.C.’s only legal gambling website,” said BCLC’s interim president and CEO, Lynda Cavanaugh.
A “grey market” has operated for years, whereby sites such as Betway or Bet99 have accepted single-game bets from British Columbians, with profit going to those sites’ owners, not the provincial government.
Punters are also less protected because those unregulated sites offer no recourse if they have disputes about payouts.
While the new federal law allows the BCLC to compete for single-game betting revenue, the corporation has since 2012 been offering punters the ability to bet on plays within games.
This kind of gambling is fuelling substantial growth in gaming revenue in the U.K. and other jurisdictions around the world.
Punters bet on things such as whether the referee will show a yellow card during the second half of a football match or whether a baseball player will hit a home run at his next at-bat.
These types of bets increase fan engagement and have turbo-charged overall gaming-revenue growth.
Research-report seller Research and Markets’ Gambling Global Market Report 2021: COVID-19 Impact and Recovery to 2030 estimates that the world’s gambling market will grow to US$516.03 billion in 2021, up from US$465.76 billion in 2020 “mainly due to the companies rearranging their operations and recovering from the COVID-19 impact.”
Online gambling is the niche with the most inertia.
Global consolidation and reorganization is taking place as corporate players jockey for dominance and realize that they need deep pockets to compete.
U.S.-based Penn National Gaming Inc., for example, on August 5, announced its plan to buy Toronto-based Score Media and Gaming Inc. (TSX:SCR; Nasdaq:SCR) for US$2 billion in cash and stock.
Score has a news and sports-score app in Canada, but it has a separate app that accepts bets in states such as New Jersey, Colorado and Indiana.
Four days later, online gambling giant DraftKings Inc. (Nasdaq:DKNG) announced it had agreed to buy another online gaming venture, Golden Nugget Online Gaming Inc. (Nasdaq:GNOG), for US$1.56 billion in an all-stock transaction.
This comes mere months after the blockbuster US$6.25 billion transaction in March, when Las Vegas Sands Corp. (NYSE:LVS) sold its Las Vegas properties for US$4 billion to Vici Properties Inc. (NYSE:VICI) and its casino operations for an additional US$2.25 billion to Apollo Global Management (NYSE:APO).
Las Vegas Sands said at the time that it would spend that capital to expand operations in Asia and target online gaming ventures. •
