All Bets Are Off Can sports betting innovate its way out of the COVID-19 shut down?

Originally published by EGR Intel 17th March 2020

The custom of putting a slice of lemon in the neck of your bottled beer started with both the Modelo and Corona brands at some ill-defined point in history. The supposed rationale behind the embedded citrus plugs range from marketing, through product and into practicality.

Some evidence suggests that it was a marketing gimmick to give the beers a Mexican beach vibe when they were marketed to Yuppie Californians in the 80’s. Another theory is that it was a complementary product device to align the beer’s taste more closely with German hefeweizen brews, noted for their citrus aftertaste. The final (and most believable, IMHO) motive for forcing a lemon slice into your beachside beer was as a barrier – damming your sweet alcoholic nectar from the

predatory investigations of the resident fly population.

For Corona at least, a fruit contraceptive has offered no protection whatsoever from its recent negative brand association. The Covid-19 virus, caused by a member of the coronavirus family, is currently spreading across the planet faster than an STI on Love Island.

This grim, pseudo-apocalyptic reality has finally caught up the business world, initially hitting airlines, tourism, professional sports and, as a direct result, sports betting. On the evening of Thursday 12th March, Arsenal’s manager Mikel Arteta tested positive for coronavirus and shortly afterwards, Chelsea’s Callum Hudson-Odoi was also diagnosed. The Premier League is now preparing for the football season to be suspended – initially for a matter of weeks until 4th April - but it would be a fool’s wager to plan for that being the full extent. With the Australian Grand Prix and Super12 Rugby also suspended, Cheltenham is increasingly looking like last orders for sports betting punters before an extended period of involuntary abstinence.

Sports betting operators have already felt the squeeze in their respective share prices with dramatic slumps across the board. William Hill shares were down more than 24% on Thursday 12th March - less than half their value on the 21st February.

GVC Holdings, the owner of bwin, Ladbrokes and Coral, dropped more than 20% and Paddy Power Betfair parent company Flutter Entertainment fell more than 15% on the same day. These drops mimic the very real impact the virus has had on major airlines including EasyJet and Lufthansa only a week before and it seems likely that the wave of disruption will continue to flow through major businesses in coming weeks and months.

If you’re not working for Andrex or Charmin, it would be wise not to rely too heavily on your bonus this year…

Racing has been through similar chaotic scenes before. Foot and Mouth Disease in 2001, a run of decimating weather in 2007 and ‘Foot & Mouth – The Return’ in 2013. In these instances, technology was the unlikely sidekick supporting betting operators when racing was off the cards – taking the quite surprising form of ‘Virtual Racing’ – 3D racecourses and horses using Random Number Generator (RNG) technology to define the outcome of races against virtual form cards and odds markets.

Inspired Entertainment, the pub fruit machine business was behind the bulk of the growth in virtual horse racing in 2007 salvaging what would otherwise have been a decrepit season for the likes of William Hill, Ladbrokes, Bet365 and SkyBet. In 2020, most operators offer some form of virtual sports betting beyond horses and even into virtual UFC fighting. In the absence of live sports events, these markets are likely to benefit significantly.

Another relatively new betting vertical likely to see significant gains in during the sports white out is esports. Esports betting has been on a steep growth curve since Pinnacle took the first bet in 2010 and now betting on matches across CS:GO, Dota2, League of Legends and other games turns over an estimated $13 Billion per year globally. With live esports events also victims of COVID-19 ceasefires, tournament organisers like ESL will probably migrate the gameplay to online ‘arenas’ – thus mitigating any risk to players or fans.

Unlike cancelled football, rugby, basketball and golf events, viewers are guaranteed via the hugely popular streaming platform Twitch, meaning that in the absence of nigh-on all other sporting entertainment, esports might be able to attract a captive audience of potential fans just itching to get a sporting fix in any guise possible.

With back to back tournaments available and a number of Professional teams itching to keep their sponsorship Dollars flowing, this could be the charge to explode esports betting into the stratosphere in the same way Foot & Mouth ignited Virtual Racing in 2007.

With the lack of live sport and a voluntary quarantine taking place globally for what may be a number of weeks if not months, there are going to be a lot of bored folk looking for a distraction. Online and mobile bingo, casino and slots operators are likely to be some of the few beneficiaries, however with such a captive audience comes a not inconsiderable risk of problem gambling. More unexpectedly available time plus an inability to socialise or take part in other hobbies means some people may easily slip into risky behaviours.

Operators (and their customer facing teams working remotely) must be prepared to mitigate these increased risks, especially in a time when the gaming industry has a media-painted target on its chest. One thought – perhaps casino brands could collectively focus their marketing efforts on low stakes games so people who play for longer periods would lose less than if they played at their regular stakes?

A collective approach to customer protection and an avoidance of profiteering at all costs would be one small step the industry could take to win back the hearts and minds of the public, media and those vote hungry folk in Westminster.

Sadly, I can’t see this happening – greed still outweighs a ‘customer first’ mentality in gambling’s corridors of power.

Its unequivocal that between professional sports, betting and their supplementary industries we’re likely to see some heavy hits – even some casualties – over the coming months.

Once you filter through Fleet Street hyperbole, it’s possible that businesses are soon to discover the benefits of a fluid work force and flexible ‘work from home’ policies. Additionally, business services companies should be able to capitalise on the rapid and essential shift in working conditions and communications requirements. As I suggested to a number of video conferencing brands via the people’s megaphone that is Twitter, offering a massively reduced or free rate to acquire a significant global ‘Working from Home’ customer base wouldn’t be a bad idea right about now…

As in any time of crisis, those businesses that bury their heads are likely to come unstuck whilst those that swing with the punches, innovate and make the best of a bad situation will come out on top.

Harry is the founder of Brand Architects, a strategic brand and integrated marketing consultancy.

You can contact him at Harry@BrandArchitects.co.uk or via LinkedIn & Twitter @MrHarryLang.