Tag: Recover

US Sports Betting Industry Will Recover

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The future of the American sports betting industry remains promising, perhaps even record-setting next year, said gaming industry analyst and SpringOwl Asset Management CEO Jason Ader.

This year, though, amid a COVID-19 pandemic that has shut down sports with cascading detriment to sportsbooks and sports networks, is about mitigating damage and learning lessons on how to safeguard that future. This applies to sports leagues, broadcasters, gaming companies and state legislators.

Among the means is for states without legalized online gaming and casinos and online poker to get it immediately, says Ader in an expansive PlayUSA interview,

The industry will come back, he said. That includes Las Vegas, which will be priced to move, he said, whenever coronavirus allows.

Q: How is the sports betting and gambling industry doing to respond and maintain itself during the COVID-19 shutdown?

JASON ADER: I think it’s been very tough. I mean, the world has much bigger problems than gambling. The whole sports and broadcast industry has been turned upside down. And from that perspective, there’s just no sports, so there’s just no sports betting at all. And you can see, there’s been some effort to find obscure sports and even eSports, the NBA obviously doing eSports with some of the top players, but the lack of sports betting has been pretty devastating for the online gambling companies.

I don’t know what more I can say about the land-based companies. I mean, they’re closed. I think it’s pretty staggering and I think this number may be low, but I do think that the unemployment rate in Las Vegas was pretty close to 50%. They’re the people who work in the casinos, the people who service the casino, the limo drivers and the companies that do the linen washing. It’s just all completely out of work and just devastating to the economy and obviously devastating for the state. [Gaming] is a source of tax revenue which is important without a state income tax [in Nevada].

The gaming industry has been a pretty good partner to the municipalities that have legalized it.

I think just about every state that has some form of gaming, it’s a top-five – and it may even be top three- – contributor in terms of overall state revenue after obviously sales tax and income tax.

Is this the biggest challenge the industry has faced?

At this moment in time, it’s as bad as we’ve ever seen and because so much of the infrastructure is closed and honestly, I don’t think it’s clear to anybody when things will reopen and what life will be like.

Is everybody going to be rushing to Las Vegas to sit at a crowded blackjack table or sweaty nightclub or busy convention center? I don’t think right away. I mean that’s something that will take a little bit of an adjustment.

I do have some fascinating statistics that I’m gonna share with you: Italy is kind of the worst-hit market in the world, maybe, in terms of death and shutdown, certainly one of the worst and still heavily concentrated. For the month of March, online casino was up 30%. Three-zero. Online poker cash games were up 89% and tournament poker revenues were up 123%. So that’s pretty amazing online statistics. So one of the things I’ve been thinking about, will land-based companies who’ve been forced to close go out and start buying online companies? You see statistics like this and they’d be crazy not to.

I mean, you’d be crazy to have literally your entire business dependent upon land-based business where you see online growth, when everybody’s forced to stay at home and you don’t know how long this is going to last. Is this going to come back in the spring time and if it’ll come back next year if you’re not going to be able to leave your home?

How big a factor was online casino and poker in relation to the Italian market before gamblers there had no sports on which to bet?

It’s a pretty big business in Italy. It’s a legal business and PartyPoker recently sort of had come back into the market, but PokerStars is one of the dominant players. People are at home and so they’re playing more, playing more poker. Italy is a relevant market. It’s a top-10 market in the world for gaming. Most people don’t realize that.

Can you estimate the monetary impact of multiple months of lost sports betting in the United States, particularly March and the NCAA Men’s Basketball Tournament?

Right now it’s down 90-plus percent. I’ve seen a lot of different numbers in terms of total revenue, but what I think the legal sports betting was on a pretty good clip to be $10 billion monthly, so $120- ish [in a year]. I really think it’s going to take several months to sort of get back, but I do think that there’ll be pretty decent pent-up demand.

I think that the U.S. sports betting, and this is for 2019 was just about billion [monthly], so the whole year was $11 billion.

There’s no really new state activity. So if you think about last year alone, it was $11 billion from sports betting and this yea it could be less than half that, but I do think next year it could very well exceed, if things normalized. 2021 could be bigger than 2019 because you’ve got the Olympics now, you’ve got the Euro Cup, you just got a lot of people who have learned how to use online gaming. You have a lot of states now that need revenues that are probably going to accelerate their plans to legalize online.

Will sports betting’s momentum as a business and a pastime more available to more people in the United States allow it to pick right back up where it left off when this is over?

It’s not going to be like that, because I think it’s been a bit too long. You’ve got a lot of people out of work, you got a lot of people who had economic damage. So the business, you can sort of flip a switch and say, ‘OK, the business is open,’ but demand is going to take some time.

Now there’s a lot of government programs that are in place. You’ve got very cheap money, you have the system flushed with liquidity. You can have follow-on Congressional activity to help small businesses. You’re going to see people get hired back, but it’s going to be like when you turn up a dimmer as opposed to a light switch.

I think we’ll get back to very strong, especially given the government fiscal and monetary stimulus that’s in place. But if everything sort of goes as planned and things in May are turned back on we could be by elections, in a much more normalized environment. We could be well on our way to a pretty strong recovery. But it’s going to take several months for that dimmer that’s almost off right now to come back on and to be producing bright lights again.

Given how bad the timing of this was in terms of March Madness, would you agree it’s crucial for sportsbooks is a return of the NFL in some capacity this fall?

I think that’s right. And again, I wouldn’t just frame this in the context of sports betting either. I mean, you’ve got gigantic television contracts, gigantic. The TV broadcasters need this and want this, too, because there’s advertisers that have made sales and there’s been advances to teams and there’s already discussions with the [soccer] teams and the clubs in Europe to pay back some of their broadcasts advance. So gaming, it’s like a derivative industry to a much bigger industry, which is broadcasting and advertising. And they all want it and they want it for their own selfish economic reasons.

And don’t lose sight of the fact that the sport is not about betting. The sport is about the broadcast and the business of sports. And, to some extent the gaming industry is the first and second derivative around that gigantic economy, which is FOX and Sky and NBC and ESPN and everything else.

What’s the forecast for the recovery of the Macau casino market?

They opened the border and there was this video that I saw with thousands of people rushing the border to get in. And they actually got pretty clean for a couple of days with COVID-19 cases, even no new cases. Everything seemed to be going great with Macau in the context of trying to make a comeback, but there was a re-emergence of some cases and it was hard to track because it’s Chinese statistics.

But borders opened up just to Chinese and Hong Kong residents. And when the borders opened up to Chinese and Hong Kong residents only, the people that got infected had been in Europe or elsewhere within the last 14 days. So what’s happened in Macau now is if you go over, it’s a pretty long border control.

Usually, you’d get through in an hour or less, maybe even a half hour if it’s not busy. And the border control is a bit extreme now. I’m seeing reports it’s taking six hours to get through the border. Nobody wants that.

But the bigger issue is the borders have tightened up again. If you leave Macau, you’re required to quarantine for 14 days. I don’t know if you’re required or suggested, but that’s sort of the deal-killer.

I’d say business is still down 88 to 90%. But you scrape a lot of travel and tourism data on Macau and the bookings, the interest in bookings from Chinese and throughout the Asia market is just extraordinary. When Macau does green-light this, I think it’s going be like a Chinese New Year demand, which is one of the strongest periods for the Macau market.

There’s just a lot of interest in returning as soon as the Chinese markets can and, obviously, Macau has built itself up now where it’s gone well beyond gaming and has the new spectacular entertainment there and restaurants and non-gaming activities have been a push by the Chinese government.

What will be the apprehension level of the gaming public or non-gaming tourists in returning to casinos or shows in Las Vegas?

I think it’s mixed. I think that the casino operators that I talked to are far too optimistic. I think they’re all hoping there will be some Memorial Day open. The rates are going to be spectacular. You’re going to be able to get gigantic rooms for like $100. And I think everybody has to drop rates to the absolute lowest level they’ve ever sold for as long as they need too.

And I think what you’ll see with Las Vegas is that you’ll see a complete sale this summer. Like, airfare, hotel, $200, over multiple nights, and then that’ll move up over time just to get people out there. So I’m sort of hearing the pricing strategies of Las Vegas as they think about reopening this summer and the prices are going to be amazing, if you don’t mind being in Las Vegas in the summer – and I’ve done it – it’s pretty hot. Even sitting by the pool can be uncomfortable.

But I do think there’s going to be a lot of people who want to go and get out and the deals they’re going to get are unbelievable. You could take a whole family to Las Vegas for like a week and have airfare included and it could be under a thousand dollars and that might even include the buffet, one or two buffet meals.

So we’re back to that, which is sort of how Vegas recovered post-financial crisis and post-recession in 2002. That’s the playbook. That’s the Vegas playbook. And price as a means for recovery becomes very compelling to conventions and meetings because conventions and meetings look at New York, look at Orlando. [You] can put the whole convention in Las Vegas and look at the room prices and look at the rates and people say, ‘Yeah, Vegas is pretty fun, let’s do that.’ So price as a weapon has always Las Vegas’s means to a recovery.

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US Sports Betting Industry Will Recover

[ad_1]

The future of the American sports betting industry remains promising, perhaps even record-setting next year, said gaming industry analyst and SpringOwl Asset Management CEO Jason Ader.

This year, though, amid a COVID-19 pandemic that has shut down sports with cascading detriment to sportsbooks and sports networks, is about mitigating damage and learning lessons on how to safeguard that future. This applies to sports leagues, broadcasters, gaming companies and state legislators.

Among the means is for states without legalized online gaming and casinos and online poker to get it immediately, says Ader in an expansive PlayUSA interview,

The industry will come back, he said. That includes Las Vegas, which will be priced to move, he said, whenever coronavirus allows.

Q: How is the sports betting and gambling industry doing to respond and maintain itself during the COVID-19 shutdown?

JASON ADER: I think it’s been very tough. I mean, the world has much bigger problems than gambling. The whole sports and broadcast industry has been turned upside down. And from that perspective, there’s just no sports, so there’s just no sports betting at all. And you can see, there’s been some effort to find obscure sports and even eSports, the NBA obviously doing eSports with some of the top players, but the lack of sports betting has been pretty devastating for the online gambling companies.

I don’t know what more I can say about the land-based companies. I mean, they’re closed. I think it’s pretty staggering and I think this number may be low, but I do think that the unemployment rate in Las Vegas was pretty close to 50%. They’re the people who work in the casinos, the people who service the casino, the limo drivers and the companies that do the linen washing. It’s just all completely out of work and just devastating to the economy and obviously devastating for the state. [Gaming] is a source of tax revenue which is important without a state income tax [in Nevada].

The gaming industry has been a pretty good partner to the municipalities that have legalized it.

I think just about every state that has some form of gaming, it’s a top-five – and it may even be top three- – contributor in terms of overall state revenue after obviously sales tax and income tax.

Is this the biggest challenge the industry has faced?

At this moment in time, it’s as bad as we’ve ever seen and because so much of the infrastructure is closed and honestly, I don’t think it’s clear to anybody when things will reopen and what life will be like.

Is everybody going to be rushing to Las Vegas to sit at a crowded blackjack table or sweaty nightclub or busy convention center? I don’t think right away. I mean that’s something that will take a little bit of an adjustment.

I do have some fascinating statistics that I’m gonna share with you: Italy is kind of the worst-hit market in the world, maybe, in terms of death and shutdown, certainly one of the worst and still heavily concentrated. For the month of March, online casino was up 30%. Three-zero. Online poker cash games were up 89% and tournament poker revenues were up 123%. So that’s pretty amazing online statistics. So one of the things I’ve been thinking about, will land-based companies who’ve been forced to close go out and start buying online companies? You see statistics like this and they’d be crazy not to.

I mean, you’d be crazy to have literally your entire business dependent upon land-based business where you see online growth, when everybody’s forced to stay at home and you don’t know how long this is going to last. Is this going to come back in the spring time and if it’ll come back next year if you’re not going to be able to leave your home?

How big a factor was online casino and poker in relation to the Italian market before gamblers there had no sports on which to bet?

It’s a pretty big business in Italy. It’s a legal business and PartyPoker recently sort of had come back into the market, but PokerStars is one of the dominant players. People are at home and so they’re playing more, playing more poker. Italy is a relevant market. It’s a top-10 market in the world for gaming. Most people don’t realize that.

Can you estimate the monetary impact of multiple months of lost sports betting in the United States, particularly March and the NCAA Men’s Basketball Tournament?

Right now it’s down 90-plus percent. I’ve seen a lot of different numbers in terms of total revenue, but what I think the legal sports betting was on a pretty good clip to be $10 billion monthly, so $120- ish [in a year]. I really think it’s going to take several months to sort of get back, but I do think that there’ll be pretty decent pent-up demand.

I think that the U.S. sports betting, and this is for 2019 was just about billion [monthly], so the whole year was $11 billion.

There’s no really new state activity. So if you think about last year alone, it was $11 billion from sports betting and this yea it could be less than half that, but I do think next year it could very well exceed, if things normalized. 2021 could be bigger than 2019 because you’ve got the Olympics now, you’ve got the Euro Cup, you just got a lot of people who have learned how to use online gaming. You have a lot of states now that need revenues that are probably going to accelerate their plans to legalize online.

Will sports betting’s momentum as a business and a pastime more available to more people in the United States allow it to pick right back up where it left off when this is over?

It’s not going to be like that, because I think it’s been a bit too long. You’ve got a lot of people out of work, you got a lot of people who had economic damage. So the business, you can sort of flip a switch and say, ‘OK, the business is open,’ but demand is going to take some time.

Now there’s a lot of government programs that are in place. You’ve got very cheap money, you have the system flushed with liquidity. You can have follow-on Congressional activity to help small businesses. You’re going to see people get hired back, but it’s going to be like when you turn up a dimmer as opposed to a light switch.

I think we’ll get back to very strong, especially given the government fiscal and monetary stimulus that’s in place. But if everything sort of goes as planned and things in May are turned back on we could be by elections, in a much more normalized environment. We could be well on our way to a pretty strong recovery. But it’s going to take several months for that dimmer that’s almost off right now to come back on and to be producing bright lights again.

Given how bad the timing of this was in terms of March Madness, would you agree it’s crucial for sportsbooks is a return of the NFL in some capacity this fall?

I think that’s right. And again, I wouldn’t just frame this in the context of sports betting either. I mean, you’ve got gigantic television contracts, gigantic. The TV broadcasters need this and want this, too, because there’s advertisers that have made sales and there’s been advances to teams and there’s already discussions with the [soccer] teams and the clubs in Europe to pay back some of their broadcasts advance. So gaming, it’s like a derivative industry to a much bigger industry, which is broadcasting and advertising. And they all want it and they want it for their own selfish economic reasons.

And don’t lose sight of the fact that the sport is not about betting. The sport is about the broadcast and the business of sports. And, to some extent the gaming industry is the first and second derivative around that gigantic economy, which is FOX and Sky and NBC and ESPN and everything else.

What’s the forecast for the recovery of the Macau casino market?

They opened the border and there was this video that I saw with thousands of people rushing the border to get in. And they actually got pretty clean for a couple of days with COVID-19 cases, even no new cases. Everything seemed to be going great with Macau in the context of trying to make a comeback, but there was a re-emergence of some cases and it was hard to track because it’s Chinese statistics.

But borders opened up just to Chinese and Hong Kong residents. And when the borders opened up to Chinese and Hong Kong residents only, the people that got infected had been in Europe or elsewhere within the last 14 days. So what’s happened in Macau now is if you go over, it’s a pretty long border control.

Usually, you’d get through in an hour or less, maybe even a half hour if it’s not busy. And the border control is a bit extreme now. I’m seeing reports it’s taking six hours to get through the border. Nobody wants that.

But the bigger issue is the borders have tightened up again. If you leave Macau, you’re required to quarantine for 14 days. I don’t know if you’re required or suggested, but that’s sort of the deal-killer.

I’d say business is still down 88 to 90%. But you scrape a lot of travel and tourism data on Macau and the bookings, the interest in bookings from Chinese and throughout the Asia market is just extraordinary. When Macau does green-light this, I think it’s going be like a Chinese New Year demand, which is one of the strongest periods for the Macau market.

There’s just a lot of interest in returning as soon as the Chinese markets can and, obviously, Macau has built itself up now where it’s gone well beyond gaming and has the new spectacular entertainment there and restaurants and non-gaming activities have been a push by the Chinese government.

What will be the apprehension level of the gaming public or non-gaming tourists in returning to casinos or shows in Las Vegas?

I think it’s mixed. I think that the casino operators that I talked to are far too optimistic. I think they’re all hoping there will be some Memorial Day open. The rates are going to be spectacular. You’re going to be able to get gigantic rooms for like $100. And I think everybody has to drop rates to the absolute lowest level they’ve ever sold for as long as they need too.

And I think what you’ll see with Las Vegas is that you’ll see a complete sale this summer. Like, airfare, hotel, $200, over multiple nights, and then that’ll move up over time just to get people out there. So I’m sort of hearing the pricing strategies of Las Vegas as they think about reopening this summer and the prices are going to be amazing, if you don’t mind being in Las Vegas in the summer – and I’ve done it – it’s pretty hot. Even sitting by the pool can be uncomfortable.

But I do think there’s going to be a lot of people who want to go and get out and the deals they’re going to get are unbelievable. You could take a whole family to Las Vegas for like a week and have airfare included and it could be under a thousand dollars and that might even include the buffet, one or two buffet meals.

So we’re back to that, which is sort of how Vegas recovered post-financial crisis and post-recession in 2002. That’s the playbook. That’s the Vegas playbook. And price as a means for recovery becomes very compelling to conventions and meetings because conventions and meetings look at New York, look at Orlando. [You] can put the whole convention in Las Vegas and look at the room prices and look at the rates and people say, ‘Yeah, Vegas is pretty fun, let’s do that.’ So price as a weapon has always Las Vegas’s means to a recovery.

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