Industry strategic consultancy Regulus Partners begins the week by looking at the potential resumption of football across Europe, and an industry-wide shift towards online gambling.
Global: soccer and betting – ready for some own goals?
While some have been getting to know and love football from Belarus and Nicaragua, the majority of fans, bettors, media companies and betting companies will be greatly anticipating the resumption of the Bundesliga (teams are back in training; 2 May is the earliest possible date) and also potentially the EFL. The latter announced today that 6 June could be the date of a full resumption after three weeks of training and preseason friendlies (from 16 May).
The EPL has also committed to completing the season (but with no date set). The return of at least some mainstream football would fill a void in many people’s lives and also provide some much needed mass-market sports for betting – likely with some unpredictable results too (that betting is c. 70% down, and online gambling is c. 15-20% down overall demonstrates the power as well as the limits of substitution). This seems like a good news story for all concerned, so what could possibly go wrong?
The first point that we would make, fully acknowledged by soccer stakeholders but perhaps not sufficiently listened to, is that all of this depends upon government plans to ease the lockdown. Germany is ahead of the curve due to testing and healthcare investment so the Bundesliga plans are a little more concrete.
In the UK there is no doubt that the government would like to ease lockdown as soon as practicable and that it is likely to see football as an important early beneficiary; but it is unlikely to materially alter the timing or nature of lockdown easing to suit the beautiful game, however much hope might be involved – we still have no idea when football in the UK can resume (which the EPL has more explicitly recognised), with spectators in the stands or not. So why we may hope for the best we must still plan for the worst (especially in terms of the fragile finances of many lower league clubs).
The second point is broadcasting. In the UK, roughly 50% of EPL matches are televised domestically while only c. 15% of EFL matches are. Without attending spectators, the only way to get the football to the fans is via mainstream TV and/or OTT streaming. Some of these have rights tied up, most do not.
Equally, while lots of football stakeholders genuinely need the money, if soccer appears to be trying to profit from ‘semi-lockdown’ demand then this may backfire politically. Similarly, whether or not betting operators will be able to stream these matches is likely to be a hot potato, even though issues of supposed ‘exclusivity’ are likely to be relatively easily swerved. Pirating is also likely to be a big problem given the unprecedented level of output and the emergency nature of the solution.
The third issue is betting data. Getting data ‘off tube’ (i.e. from the broadcasts) is dangerous given latency issues (there could be swarm of drones above stadia if countermeasures are not taken) and can also carry IP risks. The ‘unofficial’ scouting model will be broken because these scouts gain access by buying tickets – that wont be available. The official collection model would seem safe since these are accredited, but this pre-supposes that journalists will be allowed direct access and/or soccer stakeholders get to decide which personnel is necessary: if access is strictly policed by an external authority then even official scouts may be considered superfluous to ‘need’ regardless of contract (we are still in force majeure territory). Similarly to broadcasting, the provision of official betting data might also be politicised as betting profiting from a public health crisis.
Fourth, there will undoubtedly be a lot of pent up betting demand that could be from some pretty frustrated individuals. Betting operators will need to handle this with considerable care and responsibility to ensure that the well being of customers is paramount: this period of re-engagement is just as sensitive and extraordinary as the current period of substitution or abstention.
Finally, and in reality the most visible element of our fourth point, lots of broadcast football matches will provide lots of opportunities for betting companies to market and advertise again, the UK ‘whistle-to-whistle’ ban notwithstanding. There are lots of ways that this too can blow up for a number of stakeholders, though betting operators will undoubtedly be the lightning rod. Similarly to pirated AV and scraped data, this environment may benefit the unscrupulous or unlicensed even if a critical mass of licenced operators behave appropriately.
We should also consider the things that don’t happen. If soccer (and especially racing, although this has a more complex value chain) is switched on before the highstreet, or if highstreet restrictions are such that retail betting cannot effectively function (e.g. social distancing in premises, stringent staff safety measures, phased reopening by business type, lockdowns for older people continuing – all plausible policy options) then the long-term viability of many LBOs will be shaken to an even greater extent than the loss of B2, in our view.
The timing and nature of turning sports back on is fraught with risk on many levels and in no way will things look ‘normal’ quickly, if ever. To navigate the risks, all stakeholders (football, broadcast media, betting, rights holders, lawmakers, regulators, press and pressure groups) will need to focus on cooperation, sustainability and sensitivity and put the need for a quick return of income at all costs, or a chance to play political football, secondary to the bigger picture. Good luck with that.
Europe: Regulation – SMBD movements seeks partners for gambling bondage
History tells us that societies respond in myriad different ways to crises. The devastating spread of the Black Death in mid-14th century Europe was met with acts of kindness and self-sacrifice but also the persecution of minorities. Some attempted to co-opt the catastrophe for their own ends (the established Church claimed that bubonic plague was a divine judgement on man’s sinfulness and organised mass pilgrimages which unfortunately accelerated the spread of infection) while the more fatalistic prepared for the worst by doubling down on bacchanalia and downright kinkiness.
Some of these themes – charity, scapegoating, opportunism and escapism – seem all too familiar in these times of Covid-19. As we have seen this week, these inherently human responses to uncertainty recur in the debate on whether gambling regulations should be revised in the light of social distancing and elevated concerns for mental health. A variety of responses have been mooted, from advertising bans, to caps on play to outright prohibition – with governments in Spain, Lithuania, Belgium and Latvia adopting some or all of these measures.
These actions (among a wide array of others proposed) are underpinned by ‘SMBD’ – a sense that ‘Something Must Be Done’ (by way of explanatory note, we observe that SMBD is distinct from its acronymic neighbour, ‘BDSM’, although both typically involve attempts to discipline and dominate others).
Perhaps the finest illustration of the phenomena is the Portuguese parliament’s passing of a ‘SMBD’ gambling bill. The bill, proposed by the ‘green’ PAN party and supported by the governing Socialist Party (amongst other left-wing groups) claims that increases in remote gambling post-lockdown constitute a major threat to good mental health and therefore ‘Something Must Be Done’: “There is an urgent need to guard against a situation that could potentially have very harmful effects – unlimited and uncontrolled access to online gaming channels, which is exacerbated by the partial stopping of the economy…People with impulse control issues, may feel less in control of their behaviour and therefore gamble more, with worsening emotional and financial consequences.”
Quite what needs to be done is however unclear as the bill did not specify which prophylactic activities in particular were to be taken. With the emergency regulations due to take effect next week, we do not have to wait long to find out – but the imperative has now shifted from protecting consumers to protecting the government (from criticism).
This is perhaps the ultimate ‘SMBD’ response but is perhaps not that different to moves in Great Britain where anti-gambling activists have composed ‘Blue Peter’ plans (“here’s one we prepared earlier”) to deal with the ‘gambling crisis’ that some seem determined we should have. As we explored in our blog earlier this week, there are valid reasons to be concerned about the effectiveness of gambling regulation in general and also its effectiveness under extraordinary circumstances; but being honest about the distinction between the two is important.
We forecast further outbreaks of SMBD-ism in the weeks ahead. The Gambling Health Alliance (GambleAware and the Royal Society for Public Health) has launched an online survey into gambling habits during the Coronavirus emergency. Based upon the rather unscientific style of questioning, it seems tailor-made to make the case for SMBD. It follows another online survey issued last week by the University of East London and concluded with such indecent haste that we were not able to view it.
Serious-minded efforts should be made to understand the effects of population lockdown (and widespread gambling shut-down) on gambling behaviours – precisely because we may discover fundamental (and fundamentally useful) insights into the effects of major supply changes; but pop-research seems to have little but PR value.
The problem with SMBD is that it often results in untested (and very possibly misguided) actions being taken as a result of misplaced motivations. In the haste to be seen to be taking action, testing is glossed over, the potential for unintended negative consequences is ignored and evaluation becomes inconvenient (lest it show that the SMBDism was misguided).
As the Harvard Medical School researchers, Debi LaPlante, Heather Gray and Sarah Nelson have observed, “RG programmes and policies that emerge from conventional wisdom about what should work are applied before evidence is collected , justified by the need to do something to control harmful outcomes.. The illogical assumption seems to be that, even though the hope and intention is for these programmes to have significant positive effects on human behaviour, they could not possibly have significant negative effects.”
Of course, every rule has its exceptions – even in SMBD. One person who has clearly decided that ‘Something Must Be Done’ is Denise Coates. This week, the co-founder and joint-CEO of bet365 donated £10m to teaching hospitals in the midlands to support them during the current emergency. It turns out that somethings really must be done after all.
Covid-19: online gambling regulation – seizing the opportunity?
While a number of jurisdictions have or are looking to restrict online gambling during the lockdown period (e.g. Belgium, Spain, Latvia, see Portugal above) and this has dominated the narrative, it is worth flagging that it is not all one-way traffic. By keeping racing going where possible US and especially Australian online-focused bookmakers have been doing relatively well, albeit at the expense of already embattled retail sectors.
More directly, BCLC’s decision in early February to increase online deposit limits (from CA$10k to CA$100k) in order to become more competitive with the grey market is now looking prescient with the closure of its retail premises – and it is especially noteworthy that this is a (monopoly) organisation with a strong track record in responsible gambling.
Colombia is also helping out its online sector in a time of lockdown by allowing live dealer casino (and online lottery), significant product enhancements that have followed regulatory research into international markets (NJ, ES, UK) to verify that the additions will not be detrimental to the ecosystem; Colombia is also reducing online gambling concession fees to factor in sporting disruption as well as clarifying hygiene and social distancing requirements ahead of possible venue opening.