Pandemic didn’t cause retail betting exodus

Tabcorp

The novel coronavirus has certainly changed the way we live our daily lives. From the digitization of banking, the migration to remote working, to the way people buy their weekly groceries – there’s been an overall shift in consumers’ priorities and preferences across all walks of life. 

Bucking this trend, somewhat, are retail betting shops. Whilst foot traffic understandably fell in markets where stay-at-home orders were imposed, most observed a significant bounceback of retail customers once they were allowed to reopen again, suggesting that the online shift may have been temporary.

In their FY21 annual report, Australian retail and online wagering giant Tabcorp, which operates TAB retail betting outlets across the country, said that despite digital wagering turnover growing 27 percent to $9.5 billion in FY21, its retail channel saw “resilient performance” once they were able to re-open after lockdowns. Retail turnover fell only 0.9 percent in the year to $5.3 billion, far from the “online migration” that some may have come to expect. 

Last year, researchers from The University of Sydney including Associate Professor Sally Gainsbury and Professor Alex Blaszcynski studied the behavior of gamblers during the pandemic and its associated lockdowns. 

They found that out of the 764 Australian adults they surveyed, most did not increase their online gambling frequency during lockdowns, and most indicated that they expected to resume their prior online and land-based gambling patterns without change. 

In July 2021, when many states within Australia went into lockdown as a result of a spike in Covid-19 delta cases, Tabcorp estimated revenue from its Wagering & Media business fell $30-40 million, but noted only some transfer to digital wagering. 

Looking over to Russia, FonBet CMO Alina Yakirevich told iGaming Business said that they did not witness a significant transfer of retail betting customers to online as a result of lockdowns. 

According to Yakirevich, when betting shops were forced to close across the country, a large number of FonBet’s retail betting customers “simply took a break from betting” adding that only 60 percent of their punters gave betting online a try. Once retail shops were allowed to open again, she saw a full return of their retail betting customers. 

“These customers saw that we were observing all the new safety measures and eventually returned to the shops. The fact that players who had been coming to betting shops for a long time didn’t transition to online can be explained by the fact that they’re accustomed to the advantages of our shops, including personal service, comfortable rooms, and cash transactions.”

Global sports betting and gaming entertainment group Entain PLC noted “encouraging early trends” in their retail shops as restrictions began to ease in the second quarter of the year. In the UK, since restrictions progressively eased, Entertain said they saw volumes return to levels only 10 percent lower than pre-pandemic levels. 

However, whilst the pandemic alone may not have changed retail betting behavior much, brick-and-mortar betting outlets would be wise to keep their guards up. 

There has been a general growth in digitization across all industries, and consumers are spending more time on their devices than ever. 

Flutter Entertainment, the owner of online wagering company SportsBet in Australia, told investors in September that they have been taking advantage of the lockdowns to engage and retain customers that they deem as “traditional retail customers.”

“Over the last 18 months, there has been a step-change in the size of our Australian business. We won a disproportionate share of traditional retail customers that migrated online, delivering high levels of customer retention since. As we look to the future, we remain excited about the prospects for the business and believe it continues to have a long runway of sustainable growth ahead of it,” said Peter Jackson, chief executive of Flutter Entertainment during a Sportsbet Investor Day on September 22. 

“With added confidence in our ability to retain these customers, we believe the events of the last 17 months may represent a permanent step change in the scale of the Sportsbet business.”