Online gaming in 2021: Analysis & Forecasts

08.12.2020

Online Gambling in 2021: Predictions

At the end of each year it makes sense to sum up, perhaps even daring to predict what will happen in the next 12 months. For annual budgets, the forecast is essential, although considering the year that we have just had, it seems almost useless.

In a year dominated by COVID-19, some online gambling trends could have been predictable. However, the total closures of online gaming markets around the world certainly showed the opposite. Given the fact that we are still in the middle of a pandemic, it may also seem silly to try to look to 2021.

And still it is something that entire companies and industries should at least try to do, even if many factors remain at the mercy of the coronavirus pandemic. With the prospect of vaccines working, we can try to make some predictions and forecasts for the online gaming industry in 2021.

Mergers and partnerships in the gaming industry

Regarding new partnerships in the industry, Peter Nolan from Digitain in his interview to GI Friday said that mergers and acquisitions will become even more important in 2021. With increasing competition and regulatory measures in recent years, mega-mergers are already taking place and have become more and more common. In the last few months, we have had several deals between Flutter Entertainment and The Stars Group, Caesars Entertainment and Eldorado Resorts (and William Hill), Evolution and NetEnt.

After a year of so much struggle for the land-based casinos and the growing market power of some of the larger online game providers, we can expect 2021 to be a year of even more consolidation than normal. The rise in mergers, acquisitions and partnerships is something that happens every year these days, but given the effects of this pandemic, 2021 should speed it up even more.

Land-based casinos: looking forward to 2022

The year 2020 has been a disastrous one for land-based casinos and slot halls. There is also very little that can be specifically predicted for 2021, given the new wave of casino and lounge closures across Europe. On the other hand, there are some reasons for optimism, especially given the excess of achievements of land-based casinos since they reopened with reduced capacity.

In general, market analytics insist on caution, which is no surprise: in the UK, as well as in the whole world, a bumpy ride is expected, progress will be slow for some time.

That is why the biggest prediction we can make at the moment is that 2022 will be the year of recovery for land-based gaming establishments such as casinos and slot halls all over the world. Only in 2022 is it expected to return to pre-COVID levels. Bright spots are likely in 2021, especially if truly effective vaccines become affordable for the population in the second half of 2021. But consistent success is not yet on the horizon.

Online casinos & games

One sector of the industry that cannot be stopped in its tracks, and certainly will not stop in 2021, is the online gaming. In some markets, this will translate more into the convergence of online commerce, although in others it may mean a more complete transition to online casino games.

While there are still those who believe that traditional casinos have an advantage as compared to online casinos, they have  had to soften their stance on online gambling throughout this year. What 2020 has taught us from a business perspective across industries, is that extraordinary events can bring retail to a complete stop. Not to mention land-based casinos and slot halls around the world that have undergone subsequent policy changes at different stages of the pandemic.

However, online casino games cannot be stopped in this way, especially games that do not depend on the sports calendar, such as card games, roulette, poker, bingo, etc. This harsh truth in comparing traditional casinos with online casinos has even led to talk of regulating online gaming in Macau this year, however realistic or unrealistic that perspective may be.

Where this is best demonstrated is the United States, where online gaming has provided states with valuable revenue during lockdown. Meanwhile, when casinos have reopened, online games have not cannibalized demand.

Online casinos in the UK have undergone a series of substantial changes in 2020, mainly in online advertising policy. The UK Gambling Commission adopted some changes in the advertising aimed at improving player's safety and limiting illegal gambling. As a consequence, the online casinos will have to take numerous measures in terms of advertising and age control of the access to their websites. On the other hand, with the new blocking measures for illegal casino websites, an increase in revenue from licensed operators is expected.

Sports Betting - Euro 2021

Sports betting in 2020 can be described as unstable. Although the complete lockdown of the major sports calendar deeply affected sports betting revenue, there has been a considerable increase since the major leagues returned. At the end of 2020, the sports betting sector has stabilized, with fewer entertainment alternatives available to players, but the main sports are now constant.

Now that professional sports organizations have strong testing procedures in place, 2021 should be a year of higher growth for sports betting companies - growth comparable to 2019 and not just against the low numbers of 2020.

Before the pandemic, Henrik Tjärnström, CEO of the Kindred Group, and Jesper Svensson, CEO of the Betsson Group, discussed their ambitions for Euro 2020. Tjärnström, in particular, said that it would be the biggest sports betting event in history. Naturally, the pandemic forced the event to be abandoned in 2020. Most importantly, however, this was not a total cancellation but a postponement until 2021. With pent-up demand for a football event so large that it will be carried over to 2021 large numbers of sports bets, in case the tournament goes as planned.

To sum up, the only thing we can be completely sure of during the pandemic in 2021 is the uncertainty itself. The safest prediction that can be made is that online casino games will continue to increase.

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