Online gambling is enjoying a boom at the moment as billions of people around the world are staying home and staying safe in accordance with government advice designed to slow the spread of Covid-19. However, whilst the increase tax take on offer will tempt some countries and states to allow the practice, others are looking to impose partial or total bans on online gambling for the duration of the pandemic.

Entertainment options have narrowed due to the ongoing global quarantine, with people no longer able to enjoy a football match, live gig, or cinema outing. This has been a boon to online video streaming platforms with Disney Plus, seeing sign-up numbers triple week-on-week after the US lockdown was announced, and Netflix driving such high volume that it has agreed to reduce its video resolution throughout Europe so as not to clog up the continental internet infrastructure network. And for those looking for more immersive entertainment options, video game platform Steam has notched up a record 24 million users, and millions more have looked to play in the best online casino.

In Sweden, reports suggest the government is looking into new restrictions on online gambling to protect consumers. According to the country’s gambling regulator Spelinspektionen, there was a 33 per cent increase in online casino registrations over the first two weeks of the pandemic and the statistics have caused concern amongst MPs. Minister for Social Security Ardalan Shekarabi warned of “extraordinary measures” if operators do not step in to self-regulate, and floated a possible ban.

Elsewhere on Europe, Portuguese lawmakers have already proposed legislation that inserts language for a partial or total ban on online gambling and in the UK MPs in a cross-party group have called on gambling firms to limit bets to a maximum of £50 during lockdown. In a letter to industry trade body the Betting & Gaming Council Conservatives’ Iain Duncan Smith, Labour’s Carolyn Harris, and the SNP’s Ronnie Cowan said:
“We are deeply concerned that as we go deeper into this crisis, more and more people will turn to online gambling as a distraction.”

Whilst MPs can impose restrictions on operators within their own markets, the international nature of the gambling market means that such actions may result in pushing players to grey-market operators based offshore. In March, research by BonusFinder found that almost a third of Swedish gamblers were already searching for offshore operators to avoid the restrictions imposed on locally licensed firms. BonusFinder managing director, Fintan Costello, explained: “Almost a third of online casino players are already looking to the black market for a more attractive offering since restrictive rules were imposed in January 2019. These latest plans would create an immediate black-market boom.”

Whereas the boom is causing concerns in Europe, US states are looking at the situation differently. Currently only a fraction of states, including New Jersey, Pennsylvania, and Nevada, allow casino gambling online and with online gambling revenues (excluding sports betting) expected to exceed $700 million in New Jersey alone, many states with increasing financial black holes will be looking at the growth with interest.

Morgan Stanley gaming analyst Thomas Allen explained in a recent client note: “We believe the impact of Covid-19 could spur more states to legalize online casino and sports betting.

“Covid-19 will likely have a negative impact on state budgetary positions, forcing them to look for new sources of taxes. In addition, legalization and the rollout of online forms of gambling can be much quicker than building bricks-and-mortar casinos (Massachusetts a good example). Finally, online can be at least a slight offset to lost revenues during phases of social distancing as we are experiencing today.”


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