The Shocking Total Dollars Not Wagered on Sports Due to Coronavirus
Coronavirus has taken the world by storm. Literally. People’s health is at stake, the economy is on edge and the things we could always count on — such as March Madness, NBA and the NFL — are no longer guaranteed. With everyone having to make huge adjustments to this “new normal,” it makes sense that many people might be wondering how all of this affects the sports-betting world.
For those worried about the impact that the coronavirus has had on the sports gambling arena, this article is a comprehensive look at what has happened and what might be coming down the line.
Consider this your go-to guide for all things sports betting. We will cover how the coronavirus has impacted sporting events, how much money is estimated to be lost, considerations for stakeholders, what people are betting on instead, how long this could go on for, and more. We have dug deep into trusted sources and industry experts to provide you with the most comprehensive information available.
The incredible amount of money that has been lost during this time will surprise you. But by the end of this article, you will have an understanding of how the sports-betting world has been hit by the Covid-19 and how you might be able to navigate the current circumstances in a way that can help you to feel a bit more in control of your bets.
So, grab your face mask, wash your hands and let’s dive in.
How Did Coronavirus Stop Sports?
As shelter-in-place orders became the standard across the world in early- to mid-March, sports tournaments and games have been canceled or postponed on a global level. At first, there were discussions about having athletes play events — such as March Madness — with no fans, but everyone realized that wasn’t possible at the time.
Sporting events around the world began to see mass cancelations and major postponements beginning March 12th with the NBA suspending its season entirely. Many other sporting groups followed suit with the NCAA canceling their spring and winter men’s and women’s championships. The Boston Marathon also announced that the race would be canceled for the first time in the event's 124-year history.
The NHL suspended its season and the PGA postponed the Masters until November 12. The London Marathon has been pushed back to Oct. 4 and the Tour de France has been postponed until Aug. 30. The Kentucky Derby, which is a huge betting opportunity, has also been postponed from May to Sept. 5.
To top it all off, the Olympics — which were set to take place in the summer of 2020 in Tokyo — have been postponed an entire year. Just like the much-anticipated ninth installment in The Fast and the Furious franchise.
Even sports that are not traditionally played in the spring have been hurt due to being unable to train. For example, MLB has already canceled all of Spring Training. This leaves sports fans with relatively bleak prospects for summer sports entirely. This also begs the question of whether or not sports should be played in the fall? Will the NFL have to shift things around as well and possibly postpone the 2021 Super Bowl?
The sporting world has never seen anything like this and, with all of these events being either postponed or canceled, does this mean that all bets are off? Will there be any sporting events for the remainder of 2020? There’s newfound hope, as we’ll discuss later.
But first, it’s time to find out just how much money is actually lost from these delayed events and the inability to place wagers on the contests.
How Much Money is Actually Lost?
Shutting down all sports is obviously going to impact the sporting industry’s revenue — so, just how much money is being lost from not having any games for bettors to wager on? The amount might just shock you.
In 2019, March Madness gambling brought in a whopping $8.5 billion, per Industry Wired. That’s nearly 47 million bettors with a typical buy-in of around $30 each. The Lines reported that the Kentucky Derby brought in bets totaling $165.5 million last year. And $6 billion was wagered on the 2019 Super Bowl. The NBA brought in nearly $500 million in Nevada alone. In total, 2019 sports bettors waged nearly $50 billion over the course of the year, according to the American Gaming Association.
The loss of such big money-making events can be catastrophic for the global economy as well as for the small independent retail locations that are home to these casinos. This is a loss that could potentially take years to recover from.
For those who are stakeholders in sports betting — a sports casino owner or just an avid sports bettors — it’s important for you to know what to expect and how to proceed given the current circumstances.
The Impact on Casinos & Las Vegas
Thanks in large part to Las Vegas, the state of Nevada had $11.9 billion dollars of gaming revenue in 2018. Nevada's general fund is fed by that same gaming revenue to the tune of 43%. The city’s economy really relies on gambling and betting to survive. But how badly is the coronavirus hurting Las Vegas and how much money is actually lost due to casino closures?
According to Nevada’s Gaming Control Board, casinos can rake in anywhere from $42,000 to $700,000 on average per day. At properties with more than 15 slot machines, the average casino profit between March 1, 2019, and February 29th, 2020 was $72,435 per day. This total is only slot-machine winnings and doesn’t include money made from the bar, hotels, and a variety of other casino amenities. In fact, casinos themselves only generate approximately 34.3% of Vegas’ resort revenue. However, COVID-19 has impacted it because people are not traveling or staying in hotels like they would under normal conditions. The economic impact will likely be felt for years after current quarantine restrictions are lifted.
Another cost to consider during this time is the fact that many casinos have kept people on their payroll even though they are not currently generating revenue and thus, depleting their economic resources even further.
Because casino revenue impacts Las Vegas’ overall economy, these financial losses can and will result in hundreds of thousands of lost jobs.
It is difficult to predict exactly how much money Las Vegas will lose due to COVID-19; however, the number is likely in the multi-billions of dollars. On the Las Vegas Strip in 2019, casino resorts made an average of $355,288 per day. Over the course of the year, that amounts to roughly $129.7 million — and that’s just for one casino resort. However, there are roughly 51 casino resorts on the Strip which would amount to, in 2019, a revenue stream of around $6.6 billion.
It can be estimated that the casino resorts will likely lose at least what their earnings could have been; however, in 2020 thus far, casinos were already generating close to 1.2% more than they did in 2019. This means that they could actually be losing way more than $6.6 billion if the shutdown continues in 2021.
On top of what the casinos are losing, it’s estimated that casinos are still spending money at a rate that they would only survive for about nine months of shutdown. For example, MGM Resorts — arguably the largest casino-hotel company in the nation — is spending roughly $14.4 million each day of the shutdown to simply pay their employees, along with maintenance fees and other expensive expenditures. Spending that dollar amount each day when there’s virtually no revenue at all can be incredibly detrimental to the company’s survival post-coronavirus.
What About the Sports Bookies?
The city of Las Vegas and casinos are not the only people or places being affected by this virus. There are plenty of people who, whether legally or illegally, manage sports-betting books. In only one weekend, it’s estimated that bookies could lose nearly $140 million. Multiply that by what could be six months of a shutdown and that amounts to roughly $2.5 billion lost. In fact, the American Gaming Association estimated that $150 billion was wagered on sports in both legal and illegal sportsbooks. These bookies are not just in Vegas either. For example, New Jersey bookies estimated that the total loss in March of 2020 was nearly $370 million in sports wagers.
Bookies are not at a total loss, however, if they are able to find alternatives to sports betting that they can record in their books. You can read more about alternative betting options and esports later on in the guide.
Considerations for Stakeholders
The question on the mind of every sports betting stakeholder is this: What happens to my money now that sporting events have been canceled for the foreseeable future? A stakeholder is anyone who places bets on sports, hosts an online sportsbook platform, or owns a casino where sports betting takes place. As with most industries, there are significant financial losses due to COVID-19.
How can stakeholders adapt to this temporarily new normal? Below we’ll walk you through a few steps that you can take when it comes to protecting your business and wallet.
Esports and Live Streaming
While most live sporting events have been either postponed or canceled altogether, there has been a slight uptick in esport betting options. For example, both the NBA and NASCAR have hosted livestream virtual contests or shown previously recorded games and races.
The online sporting world has opened up the possibility of an increase in esports betting. Events that are streamed live give bettors an opportunity to feel a similar rush to that of betting on a live sporting event. While this system is far smaller than the standard sports scheduling, it is proving to be a positive alternative for this sports-less world.
Booming with no Competition
While esports are not quite as popular for betting as standard sports are, and with no other options, sports bettors and bookies alike are turning to esports to fill the gap during these unstable times. Prior to the coronavirus shutdown, esports were projected to make an estimated $12.9 billion in 2020. While there have not been any new projections made since coronavirus took over, it will likely be much higher with the increase of esports betting.
Already, there are some esports betting platforms that are growing exponentially. The mobile app One Up has seen a growth of approximately 182% month over month. The app has ranked in the top 15 for the last 2 months over companies like FanDuel, UFC, and even the NBA. Another company, Monkey Knife Fight has reported that they have 20 times more active users than last year with roughly 25% growth week over week.
In fact, with states trying to recoup their losses, they are much more willing and open to legalizing esports betting. For example, New Jersey has proposed a bill that would allow esports betting, while Nevada has also recently approved esports wagering.
Why were states not open to esports wagering prior to COVID-19? Primarily the concern was that without someone to monitor the bettors, it would be easier for them to cheat or rig the game. However, the current circumstances have led to a reconsideration of that stance in order to pump a bit of money back into the sports wagering industry.
Miscellaneous Wagers and the Law
Betting on live-streamed sporting events is one way stakeholders have adapted to COVID-19 sports cancellations. Another way that stakeholders have adapted is by betting on non-sports related events altogether. However, this betting method is a gray zone when it comes to legality.
A Costa Rican sportsbook company, Bovada, started taking bets on the weather. This means that bettors were choosing random temperatures for cities around the globe and placing bets. If a company is legally allowed to manage sporting bets and then they are suddenly taking bets on the weather, it becomes questionable as to whether or not these bets are actually within their jurisdiction. Tread lightly when it comes to choosing alternatives to sports betting that are starkly outside of the sporting world.
Losing money and betting opportunities, furloughing employees, or even having to shut down a business are situations that the world is facing at a level that has never been seen before. However losing your job is one thing, breaking the law is another. Be mindful when it comes to adapting your sports betting to the COVID-19 circumstances.
It is important to remember that, though it may seem like this will never end, sports will eventually return.
Looking Into the Futures
So, if the options are relatively limited when it comes to games and events you can bet on during COVID-19, what does this mean for futures, or bets that have already been placed? Well, for March Madness, which was arguably the sporting event most affected by COVID-19 thus far, bettors with future wagers on games are set to be refunded.
Refunds are the standard approach that the majority of sports leagues are taking when it comes to futures placed on canceled games.
If a game has been postponed due to the coronavirus, when the game does eventually happen, your future wagers are still viable. However, if you bet on an entire season, that entire season must be completed in order for you to redeem your winning bets. With everything up in the air when it comes to postponements and game cancelations, it is smart to keep all of your tickets and bets organized in order to either obtain a refund if the sports league is offering them or redeem your winnings once the game is actually played at some point in the future.
What People are Betting on Instead
With betting on sports being drastically cut due to COVID-19, what are people betting on instead? The results might surprise you.
It turns out that roughly 35% of Americans who frequently bet on sports are willing to place bets on statistics and facts about the coronavirus itself. Please note that while this may be interesting and relevant for the bettors, betting on the virus is actually not legal.
On a more legal note, sports bettors made the most of the 2020 NFL draft with some commentators projecting around $500 million to be spent on betting during the annual selection process.
Even table tennis bets have picked up steam amid the dry and desert land where the world of sports once stood. Sports bettors can place bets on darts and even foreign sports if their teams are still playing.
Don’t forget that esports — like FIFA 20 — are up for betting as well. So, while there are significantly fewer events to place sports wagers on, at least there is an opportunity to get a little creative and learn about other sports that are still somehow remaining active during the global shut down.
How Long Will This Go On For?
The question of how long will coronavirus last is rattling the nation and the world. Not only has everyone’s day-to-day lives come to a screeching halt, but the effects will also continue to ripple outward for potentially years to come. For example, if baseball had to postpone or cancel spring practice, will the teams be ready for a summer 2020 season? Will there be football to watch in the fall?
According to Jared Evans, who is a senior researcher at Johns Hopkins University, the answer is relatively bleak and still unclear. Evans said that essentially we need to be prepared for anything — including disappointment.
Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, has said that the only way to stop the virus (and thus lift all restrictions on congregating socially) is to develop a vaccine, which might not happen until 2021.
As much as athletes, sports fans and bettors alike would like for sporting events to come back sooner rather than later, it’s also important to note that opening up too soon and relaxing the social distancing measures could create a second wave of the virus, which is the last thing anyone wants.
Another possibility is that sporting events could happen, but fans would not be able to attend until stadiums can confidently assure that the fans are safe to be in close quarters with other people. This is something the NBA will consider as they try to return in the summer.
Ultimately, the coronavirus is highly unpredictable because we have never experienced anything quite like it before. As far as your sports betting endeavors are concerned, there is hope that the sports will come back eventually and you will be able to continue betting as you once did.
So, there you have it - a complete breakdown of how the coronavirus has affected sports betting. While it may feel a bit bleak, all hope is not lost. Don’t forget that if you’re craving to place a few wagers, esports is likely the best way to go at this time.
Photos: Getty Images / Lines.com Illustration