Since the onset of the coronavirus pandemic, gambling companies in Britain have increasingly looked to shore up and expand their online offerings, with lockdowns shuttering betting shops.
The closure of commercial and social venues and the prolonged cancellation of major sporting events fundamentally shifted the gambling landscape around the world.
For instance, despite its physical stores being shut for much of the past 12 months, FTSE 100-listed Ladbrokes owner Entain saw its core earnings rise 11% to £843.1 million ($1.19 billion) for 2020, £803.5 million of which came from a 50% surge in its online gambling offerings.
The company’s stock notched a record high at £17.25 per share in late April and was up more than 36% year-to-date as of Monday’s close. It’s currently up around 124% from its recent low during the initial Covid-induced crash of March 2020. The likes of 888 Holdings, Rank Group and Gamesys have all performed strongly since last March. Meanwhile, Bet365 CEO Denise Coates recorded an annual pay packet of £469 million last year, one of the highest in British corporate history.
But with isolation, boredom, stress, anxiety or financial worries heightened for many people during the pandemic, concerns have also been raised about a potential spike in addiction and harmful gambling.
The Gambling Commission, the U.K.’s regulatory body, found that while fewer people were gambling during the pandemic, many already engaged online gambling consumers were expanding into new activities and spending more time and money betting.
The Commission noted that engaging with a broader range of gambling activities can correlate to higher levels of “moderate-risk and problem gambling,” and has expressed a particular concern about the increased take-up of online slot machines.
Dependence on the vulnerable
Matt Zarb-Cousin, co-founder of Gamban, a software provider that blocks access to gambling sites, told CNBC that with sports fixtures canceled and gambling companies increasing digital advertising threefold since the first U.K. lockdown last March, many casual betters had been drawn toward more intense activities such as slots and casino games.
“Broadly speaking, the business model is to get people signed up to bet on football or racing or sports generally, run that at a very low margin — sometimes at no margin at all, sometimes even a loss leader — and get as many of those people onto the slots and casino games as possible, where there is a significantly higher margin and these are more addictive products,” Zarb-Cousin explained.
He also noted that while gambling companies allow customers to self-exclude from their services should they feel worried about the extent of their gambling, they actually depend on a very small proportion of customers who are most at risk for a substantial percentage of revenues.
