Corona has little impact on turnover online casinos
It seems that so far the corona crisis only has little impact on the turnover of online casinos. We base this conclusion on the results of LeoVegas for the first quarter of 2020. Although LeoVegas is one of the bigger online casinos, we know these numbers are not a 100% reflection of the entire online casino industry. Also it remains to be seen what the impact will be in coming months because the big changes in many countries only started in March.
When we look at the first quarter of 2020, online casino LeoVegas had little trouble from the corona crisis, but the future is uncertain, not just for LeoVegas but for the entire industry. Gustaf Hagman, CEO and cofounder of LeoVegas: “Difficult to determine the long-term effect …”
The figures are extra interesting, because everyone is wondering whether the pandemic and the closure of land-based casinos are causing extra turnover at online casinos, or not. Gustaf Hagman gives a nuanced answer to that question and says that so far corona has had “a minor impact”. On the one hand, consumers have more money left to gamble, because they spend less money outside: “Gaming and gambling online is part of the entertainment industry, and when people can no longer go to cinemas, restaurants and similar, more of their leisure budget can be spent on other entertainment, such as gambling.”
Where online gambling turnover is doing fine, sports betting turnover has completely collapsed. At LeoVegas, sports betting before the corona crisis accounted for 9 percent of sales. In total, turnover in the first quarter amounted to € 89.4 million. That is 4 percent more than in the same period of 2019.
Lower in Sweden, higher in the rest of the world
Hagman thinks corona has led to lower sales in Sweden. In that country, restaurants and cafes are still open and the land-based casinos were open until the end of March. Outside of Sweden, corona is driving slightly higher sales because consumers are shifting their gambling spending from land-based casinos to online and because LeoVegas is taking market share from casino providers that rely more on sports betting, such as Unibet and William Hill.
This is reflected in the player numbers:
- The number of depositing players was 413,269. That is 6 percent more than a year ago.
- The number of returning players was 219,841. That is 10 percent more than a year ago and the highest number ever.
“Number of problem gamblers is not increasing”
The turnover in Sweden is likely to fall sharply in the current quarter, as the Swedish gambling authority has imposed strict deposit limits due to corona.
Hagman is annoyed about this, because he says the number of problem gamblers has not increased in corona time. “Thus far we have not seen signs from our data that problem gaming among our established and new customers has risen, and we are paying great attention at the individual level to ensure that this remains the case.”
In the longer term, the effect of corona on online casinos is uncertain, Hagman said. He sees two opposite trends: “It is hard to predict the long-term effects for LeoVegas, but the longer the crisis continues, the greater the risk is that revenue will be negatively impacted by consumers” reduced purchasing power. At the same time, an accelerated structural shift is expected from land-based to online gaming, which makes LeoVegas well-positioned for the future.”
It also remains to be seen what impact the corona crisis will have on land based casinos and wether or not land based casinos have lost a part of its clientele to the online competitors.