Tottenham Report: European Gaming Wakes from Covid Nightmare By Scott Longley May 19, 2021 at 10:00 pm There was something almost plaintive about Rank’s social-media messaging in the days before the UK’s harshest lockdown measures were lifted across most of the country. “There’s three days to go and we can’t wait. It’s been too long, but the good times are coming back,” the company predicted. “We’ll be swinging open Grosvenor’s doors on Monday 17 May and we can’t wait to see you!” It’s an upbeat message after an incredibly damaging year. Rank’s Grosvenor Casino and Mecca Bingo estates are yet to do a day’s business so far this year after a hugely disrupted 2020. In its half-year results to December, the company said it had seen zero days trading under normal conditions at either Grosvenor or Mecca, while the casino estate had been closed for 56% of the period and Mecca had been shuttered for 41%. The rest of the time, the two estates traded only under severely restricted conditions and it left like-for-like revenues flattened, down 56% at Mecca and 78% at Grosvenor. It was a story that was repeated across Europe. In late April, the European Casino Association (ECA) revealed a members’ poll that showed that land-based casinos lost 37% of normal operating days in 2020 due to various mandated COVID closures. Worse, it said that 70% of all European land-based casinos remain closed at of the end of April and that revenues had dived by over 50% in the past year. The situation was similar with Europe’s betting shops. Fabio Schiavolin, chief executive at Snai, points out that in Italy, the shops were “hit hard” by the pandemic lockdowns and have been closed for long periods of time. “It’s been even longer than those imposed on other product categories with a higher risk of contagion, such as restaurants, hairdressers and beauty centres,” he adds. The silver lining in all this for Rank, but also for many other gaming companies with land-based betting shops, bingo halls, slots halls or casinos, is that most have a digital component to their business. In the first quarter, for instance, Rank was able to talk about online net gaming revenue rising 3% on a like-for-like basis and 4% overall when the Stride acquisition was taken into account. Indeed, the nature of the extended lockdowns and already-fermenting worries about booming online markets led to widespread assumptions at the onset of the COVID crisis that online gaming activity – and with it, incidences of problematic behaviour – would soar. It led to various pre-emptive strikes, particularly in Sweden, where authorities instigated emergency measures last summer on bonuses that will remain in place until the end of this year. But the evidence from the first quarter suggests that while online activity obviously increased, it was by no means uncontrollable. In Sweden’s near-neighbour Denmark, for instance, online casino GGR rose 28.7% to DKK717m, but this was hardly the tsunami of gaming that might have been expected considering the land-based gaming machines and casino sectors saw revenues go to zero. Moreover, online betting GGR went backwards year-on-year by 7.5% to DKK588m. As the report stated: “Whether or not the increase can be ascribed to the corona lockdown is uncertain, but it should be noted that the increase does not counterbalance the fall of the land-based market in the same period.” Out of the woods The Rank social-media message points to the crisis coming to an end – in some countries at least – in the foreseeable future. But attention now turns to whether the land-based-gaming customer base will return. Ivor Jones, analyst at Peel Hunt, says of Rank that the evidence from the company’s Enracha businesses in Spain, which were open by the end of the first quarter and were “experiencing strong demand,” was a positive signal for the UK businesses this coming summer. He adds that gambling is more than simply a “transactional activity” and that helps account not just for the potential return to land-based gaming, but also for the move to online seen during the pandemic. “It was entertainment seekers,” he says of those that did move online during the first lockdown and beyond. Schiavolin says there has been a “significant migration of the retail customer base to online” and while many will return to their previous activities, “it is reasonable to think that part of this change will become structural.” This shift signals the deeper embedding of omni-channel gaming activity across a wider player base. Schiavolin references Italian intellectual Luciano Floridi, who has previously posited about people enjoying an ‘onlife’ where in a hyper-connected world, the distinction between online and offline becomes increasingly blurred. “Our goal as a company is to arrive at an ‘onlife’ gaming experience, where the customer is no longer tied only to the site or the agency, but lives a cross-experience,” he says. “In Italy, the work is complex, given that current regulations do not allow for a single player’s wallet. When regulatory changes allow it, the omnichannel will become a unique gaming experience, between retail and digital spaces.” Such a plausible outcome has implications for the sector as a whole. Not the least of them would be to bolster those operators with a credible omni-channel offering, while heaping further pressure on those that are either sub-scale in online or holding out altogether. This also poses challenges for legislators and regulators who will have to increasingly view the inter-connected gambling landscape with a new lens. That might prove a longer-term challenge than the recent pandemic. Scott Longley has been a journalist since the early noughties, covering personal finance, sports and gambling. He writes for a number of online and print titles.