FOCUS

Ball games bounce back!!

Major sporting events are slowly ramping up around the world and with them the drama and surprises, not all of them good for sports betting operators.

PaddyPower concedes it was thumped to the tune of GBP580,000 after Bayern Munich humiliated Barcelona with an 8 goal to two defeat in the Champions League Quarter Finals in August.

Still, at least the live events are back and in this edition we dedicate our Focus Section to betting on sports. In our first article, some leading sports book companies share with us their experience of getting through the Covid-19 shutdowns and how flexibility and a focus on eSports and virtuals has helped them through to the other side.

They also discuss the booming prospects for the market in Asia and hold out the tantalizing hope that more jurisdictions around the region may be tempted to regulate their markets post pandemic.

In our second article, we focus on India. A bill to regulate sports betting there has lapsed due to general elections and resurrecting it hasn’t been a priority for the new government. However, fantasy sports are booming.

As a skill-based game, it is considered legal, although experts warn it’s important to ensure your business model truly does require a preponderance of skill.

The sector took a breather from its stellar growth during the pandemic-mandated sporting hiatus, but is expected to come back with a vengeance as the India Premier League cricket tournament begins mid month in the United Arab Emirates.

In our third piece, sports betting expert John English, who has more than 30 years of experience in the business, working in multiple jurisdictions, offers his views on the impact of the Covid-19 pandemic on the global sports betting industry. This year the unthinkable happened with all global sporting events cancelled, leaving the sector reeling in shock.

But adapt it has, and there is light at the end of the tunnel. However, John argues that it’s high time for companies to have the ability to have online channels available to help spread the risk of events such as this on the land-based sector.

Punters flood the sports betting zone

Kung Volleyball, ping pong and Tajikistan football leagues are just some of the exotic sports that saw wagering action during the pandemic shutdowns, though now regular events are opening up, operators are noting a big swing back to old favourites.

Footballers have returned to the pitch in Europe, albeit without live audiences, while similarly fans were not on hand to witness U.S. Open favourite, Novak Djokovic, eliminated after hitting a line judge with a ball. The punters have returned nonetheless and still have a strong appetite to wager on sports. “The return of sports is a shot in the arm for the industry,” Pronet Gaming Sportsbook Director Thomas Molloy said. “Players have flooded back in their droves to wager on their favourite sports again. We have enjoyed our best summer on record and with the start of all toplevel football back in September we are in for a busy end to 2020, providing Covid-19 remains under control.”

Through the pandemic, Pronet was able to offer more than 50,000 in-play events per month as it ramped up its products with eSports and virtual sports content. It also rolled out a simulated reality product, allowing betting on the top-level events that had been postponed.

“Since the return of live sports, betting behaviours have gravitated back towards pre-Covid-19 norms, especially with staple sports events like top-flight football,” Molloy said. “Although punters may have been forced to bet through different channels, money lines, handicaps and totals remain as popular as ever.”

Sergey Tsukanov, head of sportsbook at BetBy concurs there has been a strong swing back to real sports.

“The schedule of sporting events is very compact since the return of live competitions, so there are consistent and high levels of betting activity, rather than it being heavily weekend focused,” he said. “We are even seeing American sports, such as the NBA and NHL, attract more interest because they offer evening entertainment for sport-starved fans.” During the crisis BetBy pivoted its focus to a new range of AI-driven esports titles, offering players digital versions of sports they already follow and understand.

We are even seeing American sports, such as the NBA and NHL, attract more interest because they offer evening entertainment for sport-starved fans.

“The diversification of our product offering was a very exciting time, but equally interesting was the increased exposure and take up of betting on other sports, such as table tennis or obscure leagues.”

In Asia, the market post-Covid is expected to continue to expand following a widely reported spike in online gambling during the lockdowns. There is some speculation too that the crisis may be a chance for governments to rethink their bans on sports betting and other forms of online activity due to the levels of revenue they are missing.

iGaming and betting consultant Anutosh Chatterjee said there had been an increased level of chatter amongst politicians in India due to the surge in online betting during the crisis. He said the government in Delhi is ultimately likely to legalize and regulate online gambling and sports betting, though not in the short term as the wheels of government grind slowly. In the meantime the market is thriving and according to Chatterjee, the Indian gambling market is now thought to be worth about $100 billion.

“Sports betting is a big part of Asian culture today and will continue to be long into the future. Wagering activities are gaining ground in countries that formerly had strict gambling policies — especially the ones in the Asia-Pacific region,” Pronet’s Molloy said.

“Overall, the Asian market is seeing a trend towards increases in betting and gaming revenue, which will continue to rise as more countries give the greenlight to online markets,” he adds.

BetBy’s Tsukanov also believes that as the market grows, governments will ultimately be tempted to regulate and reap the benefits of taxation revenue.

“Legalisation has already occurred in some countries, and with the shuttering of land-based casinos in others, we may see even more nations regulate sports betting in the coming months and years,” he said.

“The US has become a country which sets an example for plenty of nations, and legalising sports betting is no different,” he adds. “Other countries will look to move in the same direction after seeing the benefits of regulated betting.”

“Asia is a huge market in terms of both population and potential, and if leading players in the region were to regulate, it could become a focal point for some of the most exciting times sports betting has ever seen.”

Fantasy sports await IPL’s return

While sports betting remains illegal in India, betting on online fantasy sports (OFS) has been the biggest growth area of the country’s online skill-based gaming industry.

It’s the one sector of online gaming in the country that hasn’t benefited from the extensive lockdowns, seeing a sharp downturn in activity as actual sports tournaments evaporated. However, with the imminent return of the India Premier League cricket, fantasy sports are expected to bounce back with a vengeance. One illustration of just how far this nascent industry has come is the emergence of the largest player in the market, Dream 11, as the lead sponsor of the league, knocking off household names such as mobile company Vivo and PepsiCo.

“Indian Premier League cricket is by far the most popular sporting event in India,” says Ranjana Adhikari, a lawyer with Nishith Desai. “It’s the equivalent, or if not more, than the World Cup, it’s almost like a religion in India. Fantasy sports are looking forward to this as finally a live event.”

Prior to Covid-19, the figures for OFS had been impressive. According to a recent report by consultancy firm KPMG and the Federation of Indian Fantasy Sports gross revenues of OFS operators stood at 2,400 crore for the 2020 fiscal year, compared with 920 crore the prior year, an increase of about three times.

The user base of the platforms has surged from two million in 2016 to 90 million in 2019, with the number of platforms surging from less than ten to more than 140 operators at the end of last year.

Cricket is firmly at the centre of the industry accounting for about 85 percent of the market, with the IPL itself generating about 35 - 40 percent of the revenue.

Dream 11 dominates, with about a 90 percent market share. Backed by China’s Tencent, the startup was India’s first gaming unicorn, gaining a valuation of more than $1 billion.

A trail blazer in the market, the company also won a landmark court case in the High Court of Punjab and Haryana in 2017, establishing a legal basis for the industry.

Broadly speaking the ruling has been interpreted as giving legal blessing to OFS as a skilled-based game, whilst in practice, it was the specific business model that was approved.

Adhikari explains that in India, a skill game must be able to prove that it has a higher than 50 percent level of skill involved.

“Courts have looked at the format. With Dream 11, you make a team and there are certain rules you adhere to and there are restrictions. You are perhaps increasing the difficulty level in regards to sports betting,” she said. “If your business model follows that you have a good case.”

When it comes to actual sports betting, it remains a legal grey zone in India. A bill was put forward to parliament two years ago that pushed to establish a legal framework for the industry, however, that lapsed due to federal elections and has been pushed down the priority list.

“Sports betting is ‘perceptually’ not allowed rather than legally,” she argues. “There is an argument based on precedent that says sports betting should be allowed.”

An interesting step forward has been taken during Covid-10 when it comes to horse racing and online betting. Several turf clubs, including Bangalore, have requested to be permitted to accept online bets due to the lockdowns and have received authorization.

The spike in online gambling in India during the Covid-19 crisis has generated a high level of publicity across the country, sparking debate and push back over legality.

That said, so far there has been no serious challenge and the status quo remains, that in the majority of states skill-based games, such as OFS, eSports, poker and rummy are legal, even when played online for money.

“Online skill gaming in India was already on a growth trajectory in the first half of the calendar year and the last quarter has witnessed a major spike in the business,” said Roland Landers, head of the All India Gaming Federation. “The Industry is selfregulated and all the AIGF stakeholders, including its OFS members have adopted the self-regulation charter in their businesses.” FIFS has expressed a similar view. It’s members follow a charter and are self regulating.

However, problems have arisen from offshore operators targeting the Indian market with games that push the envelope of what is skill-based and what is pure chance.

Legal experts say any company wishing to operate in the sector needs to take a highly prudent approach and seek legal counsel as to whether their business model will pass muster.

Is it time to rethink the industry or is it business as usual?

John English* | CEO, WEBE Gaming

In the midst of the COVID-19 pandemic, which has pretty much decimated brick and mortar casino and betting shops worldwide, is there light at the end of the very long tunnel?

I believe the answer is a solid yes, without doubt. Although there is not yet a vaccine that has been approved for global human consumption there appears to be hope on the horizon that one or more could arrive by the end of 2020. Once immunization and ongoing safety protocols become commonplace travelers should resume visiting integrated resort and sporting destinations and the gaming sector will gradually recover including sports betting and other forms of live entertainment.

Since mid -March the world of sports has not been the same as punters with pent up demand were wagering on table tennis, Korean and Taiwanese baseball, and the somewhat new but fast-growing sector of esports.

However, over the last couple of months sporting events are happening and it appears to be on the road to recovery, even if it’s in a bubble, punters are placing their stakes.

So where is the light and when will we reach it? After speaking with a plethora of operators of casinos and sports betting operations to hear what their plans are for the immediate future and beyond, the consensus seems to echo the same common-sense sentiments. First, we need a vaccine and or treatments that will quell the fear of public interaction, secondly, we need to maintain temperature checking, sanitizing and cleanliness, and most importantly we need to move on with our lives and reopen cautiously. I feel that is a good start to rebuilding the trust with the public to leave their homes and it is a proper way to handle brick and mortar facilities as sanity is also important and locking people down in their homes will not be the infinite answer. I hope and believe that 2021 will be the year that 2020 started out to be…Prosperous.

With that being said I am a firm believer in the future of online gaming and sports betting more than ever, and I have been an avid supporter since the internet became a reality, it has proven to be entertaining, engaging and most importantly safe with proper regulation. I am looking forward to the future of online gaming to not only recover lost revenues and add much needed gains but also to keep our industry healthy and people employed. As we witnessed many jobs were lost and positions eliminated from the land-based operations. Places like Macau, Philippines and Las Vegas are heavily dependent on visitation and with border and flight restrictions, employment and stock values fell rapidly in the gaming sector.

With online gaming and sports betting, I see the light ahead and 2020 will be in the rear-view mirror soon enough, new jobs are being created, people can be entertained from the comfort of their home, and vast growth is happening. Some jurisdictions in the U.S. and Asia are already regulating and embracing online gaming as a lifesaver, a growth vehicle, and also as a way to maintain an ongoing relationship with their customers. Approximately 60-70 percent of sports wagers come over mobile phones and what was once called the second screen, this year the tablet or PC have become the main screen. From a casino perspective Live dealer games such as roulette, Blackjack, and Baccarat are as close to being in the casino as possible, slot games, bingo, keno, and lotto are all available to play remotely. In the online sector we have seen several billion- dollar mergers and acquisitions and even public offerings carry on without delay. Many casino properties are tied to online companies and sports betting and media partnerships are being announced weekly.

In the online sector we have seen several billiondollar mergers and acquisitions and even public offerings carry on without delay.

Sports betting may have had the largest impact online since there are many things that can be done from your smartphone or laptop that are sometimes cumbersome in a betting shop or over the counter at a casino point of sale. The thin margins in sports betting have found a growth sector with in-play wagering, early cash out, easy funding and a wide variety of sporting events all within reach of an app or a browser.

The COVID-19 pandemic was not predicted and for the last 35 years I have always felt that as a sportsbook operator we would never experience a complete shutdown and then the unthinkable happened and it happened fast.

I’m thankful for online wagering and the passion and creativity of our industry to move past this moment in time. I hope to see more regulators and operators in global gaming territories use technology as a beacon to see our way through the tunnel and into a bright future.

* A well established entrepreneur in the online gaming space, John English has worked in the gaming industry for more than 30 years. He is a partner and managing director, Sports Betting and Technology at Global Market Advisors and is the founder of Webe Gaming.