The pandemic and the real (and hypothesized) changes in gambling behavior have pushed policy makers to seek a new balance between safety, the competitiveness of operators and tax revenues.
How have player behaviors changed in various countries around the world during the Covid pandemic? We talk about it in this in-depth study edited by economist Michael Haile for the February GiocoNews magazine . Here is the first part.
The Covid-19 pandemic has had an unprecedented impact on life throughout the world. Governments were under extraordinary time pressure to swiftly develop policy responses to the pandemic. In 2020 and 2021 Covid affected almost all countries and had governments operating in an environment of extreme uncertainty, and faced with difficult dilemmas due to the health, economic and social challenges the pandemic presented. Halfway through 2020 more than half of the world’s population was living through unprecedented restrictive measures that were decreed by governments to halt the spread of the virus.
In normal times, regulators and policy makers design regulatory models to meet general principles of regulation which can be synopsised as proportionate, fair, consistent, targeted, transparent, preventative and sustainable.
In the long run, the main principle that overrides all is harm prevention. In short, the regulatory system should be designed to reduce harm and in no way should cause more harm than it prevents.
Governments issued many types of legislations to stop the spread of Covid, and these laws can be defined as “lockdown regulations”. The term “lockdowns” refers specifically to restrictions relating to movement and gatherings of people and further limitations imposed on businesses. Other coronavirus related laws include imposing constraints on international travel and wearing of face coverings.
Some of the legislations enacted in Europe and North America contain among the most dramatic intrusions into civil liberties and business practices in the modern era. The overriding objective of these laws was to limit social contact. Basically, governments locked people in their houses and closed all non-essential businesses.
Consequently,
the pandemic accelerated the digital transformation of every part of people’s lives, from ordering groceries to attending meetings, from making payments to calling a cab, from shopping to seeing a doctor, everyone’s life became increasingly digital, and the gambling industry has not been spared this digital transformation. In many countries in person venues were closed, and where they were open, were under strict social distancing measures.
The gambling sector experienced the overnight closure of in-person venues almost globally. Lockdowns left players often isolated in their homes. Online became the preferred, and in many jurisdictions, the only form of gambling available, bringing to the forefront the role of regulators in safeguarding online gaming or where relevant, strictly enforcing existing regulations.
REGULATORS' UNCERTTAINTY - The spread of the virus has impacted gambling markets in a multitude of ways and national government responses to the pandemic have differed greatly as have reactions by gambling regulators. The initial reaction of regulators was that people, Once locked inside their home, their gambling frequency and spend would critically increase, a concept that was construed without much evidence or precedence.
In June 2020 the International Association of Gaming Regulators (Iagr), representatives from gaming regulatory organizations throughout the world, conducted a survey so to analyse the global impact of the pandemic on the gambling sector. In total, Iagr members from 47 jurisdictions were consulted (Europe 38%; Africa 21%; North America 17%; Asia / Oceania 15%; Central America-Caribbean 9%; South America 7%).
Iagr reports that during the pandemic land-based gambling suffered a dramatic fall. Iagr members reported a decrease of Ggy from casinos, slots-not in casinos, bingo and betting. This fall was a consequence from business closures. The global impact on the lottery sector was less, with only just over half of respondents reporting a substantial drop in Ggy. This was probably due to lottery products being typically purchased from food shops and other retail stores, which remained open in most jurisdictions.
Global online gambling (47 countries)- During Covid-19, did your jurisdiction experience a substantial change in Ggy for online gambling?
There were several international studies conducted on gambling behaviour during lockdowns and most of these studies revealed similar patterns of behaviour.
Most international studies conducted on the impact of the initial Covid lockdown on gambling behaviour showed an overall reduction in gambling in both the general population and some gambling samples. These studies showed a similar pattern, with gambling being reduced overall or more participants reducing their gambling during the restrictions than the number who increased their gambling. The European Gaming and Betting Association (Egba), a Brussels-based trade association representing the leading online gaming and betting operators, anticipated activity and revenue in the licensed online market would decline substantially in the absence of major sport events. Sports betting is a huge part of the market and accounts for more almost 45% their members total online revenues. In the initial phase of the pandemic lockdowns, Egba predicted that the absence of sports betting would leave a considerable hole in the market, and increases in other forms of games, such as poker, casinos and e-sports would not compensate for the suspension of sports betting, however regulators in many countries disagreed.
The one research that found an increase on online gambling was conducted in the Uk. The study found that 30% were gambling more, while 32% were gambling about the same and 37% were gambling less compared to before lockdown. Of the respondents whose online betting activity had increased since the start of the pandemic, 34% were concerned that they were spending too much money that they could not afford and a further 30% had concerns that they were developing a gambling addiction.
However, in the main, market and regulators’ data confirmed Egba’s forecasts. Data showed there has been a significant decline in online gambling during lockdowns. According to the respective national regulators there has been a 38% decline in traffic to licensed gambling websites in Belgium, a 60% drop in Denmark, and a 6% decrease in Sweden. The Gambling Commission (Gc) in the Uk also found that 67% of citizens have not gambled during the coronavirus and, of those that had, three quarters had not spent more time or money on online gambling.
A Swedish study reported a significant decrease in online betting after 11 March 2020 (by 74.8%). However, there was a smaller but significant increase in online casino gambling (8.6%) during the same period. A second Swedish study of online sports bettors from Sweden, Germany, Finland, and Norway found that after 7 March 2020 the percentage of sports bettors using casino games decreased after 10 March as all gambling rapidly declined.
In Denmark lockdown started from 11 March 2020, where all land-based casinos and gambling arcades were closed, and sporting activities put on hold.
Data from the Danish Gambling Authority from 9 March to 3 May revealed a decrease of 60% in deposits at operators with a Danish licence compared to the same period in the previous year.
Portuguese players went the other way. In Portugal, according to the Game Regulation and Inspection Service, in the first trimester of 2020, online Ggy increased by 47.5% compared to the same period of 2019, with an increase of 26% of active players.
Outside Europe a study conducted in Canada showed that nearly one-third of gamblers reported ceasing gambling altogether during the lockdown. For the continuing gamblers, data indicated significant decreases in gambling frequency, time spent in gambling sessions, money spent, and the number of game types played. The study indicated that 17% of the gambling sample migrated from terrestrial to online gambling during the lockdown (males and younger adults were more likely to have gambled online during lockdown). A general population survey in Canada found that the number of online gamblers who reduced or increased their online gambling during lockdown was similar. It found 26% were gambling more than usual or much more than usual and 27% were gambling less than usual or much less than usual. However, online gamblers were a small proportion of participants as most reported no online gambling before or during Covid-19 restrictions.
A study conducted in Australia revealed online gambling participation increased from 62% to 78%, quite a substantial rise.