The coronavirus disease a.k.a. COVID-19 has resulted in a global pandemic with devastating ramifications. It has crippled worldwide financial markets, bringing economies to a virtual standstill. Bearish sentiment has gripped Wall Street and Main Street, with widespread calls for increased isolation and quarantine, bar a few exceptions. One US state after the next is tightening the screws on the virus by limiting the public’s exposure to this deadly pathogen. Rigorous hand washing, social distancing, and general isolation policies are being implemented across the spectrum. From big business to the world of sports, shutdowns are taking place at a steady clip.
Sports Leagues Postpone or Cancel Championships and Tournaments
The severity of the coronavirus pandemic has hit home with a vengeance. Sporting leagues are eager to protect their prized assets – their players and their fans – so they wasted no time shutting down all of their events. These include the following: National Hockey League (NHL), the National Basketball Association (NBA), Major League Baseball (MLB), Major League Soccer (MLS), and the National Collegiate Athletics Association (NCAA), among others. Even the newly-formed XFL professional football league closed up shop for the season, and they intend to reopen in 2021. Sportsbook operators and punters across the board are faced with the prospect of nothing to bet on, and nothing to watch, almost…
Fortunately, many of the leading online bookmakers have not shuttered all betting on futures a.k.a. matches and tournaments taking place well in the future. It is entirely possible to bet on the Tokyo Olympics (Friday, 24 July 2020 through Sunday 9 August 2020), the Winter Olympics (Starting on Friday, 4 February 2022 through Sunday, 20 February 2022), and the IIHF Men’s Ice Hockey World Championships (beginning on Friday, 8 May until Sunday, 24 May), among a list of others. At a time where commissioners and presidents of sports leagues are scrambling to shut everything down, it appears that the spirit of the Olympics remains strong in defiance of the coronavirus. A caveat is in order: the situation remains fluid, and the severity of the pandemic may yet warrant a rethink of the decisions currently put forth by regulatory authorities in these respective sports tournaments.
The Financial Effects on the Sports Betting
ESPN reported on the financial impact that the coronavirus is having on the sports betting industry. In early March, the NCAA March Madness tournament was cancelled, leaving basketball fans dejected, but understanding of the severity of the situation. First it was the NBA, and then pretty much every other professional and amateur sports league followed suit. For those who enjoy watching sports, the pandemic has put paid to that notion. For those who enjoy live betting on sports, the industry has all but ground to a halt. Sports betting operations in the US are predominantly centered in Las Vegas and Atlantic City. When SCOTUS (Supreme Court of the United States) overturned PASPA (Professional and Amateur Sports Protection Act of 1992), led by New Jersey, a slew of legislations at state level gave rise to regulated online sports betting operations. These too have been hit extremely hard by the coronavirus.
It is too early to tell what the long-term impact of COVID-19 will be on the sports betting industry. Analysts can only extrapolate based on available data. That data indicates that the total revenue generated by US states (West Virginia, Rhode Island, Pennsylvania, New York, Oregon, New Jersey, Nevada, Iowa, Mississippi, Delaware, Indiana) amounted to $1,229,693,083 in revenues (beginning in June 2018 through February 6, 2020). The data indicates taxes/state revenues of $155,684,750. New Jersey and Nevada lead the pack with $393,420,427 and $522,960,000 respectively. Pennsylvania has also made massive inroads into the sports betting industry with revenues of $114,248,501 since November 2018. The shuttering of sports matches, tournaments, and events across the country (and ostensibly across the world) has effectively dried up betting activity and revenues for sportsbooks.
Legal Sports Betting In 16 States Grinds to a Halt
The data indicates that legal sportsbooks now exist in 16 states across the country, the latest being Michigan and Illinois. With the cancellation of March Madness a.k.a. the Big Dance, most bettors who had existing bets with the sportsbooks will have them refunded. For many futures events, it’s a wait-and-see approach that is going to take place. If entire seasons are cancelled and not only postponed, it is within each sportsbook’s purview to determine what to do moving forward. The rationale behind the closure of all these sporting events across the board is clear: to prevent further spread of the deadly pandemic. Even more significant is the fact that the US casino gaming industry – a much broader part of the gambling market which is valued at $261 billion has shut down. Staff members have been sent home, or laid-off indefinitely, and betting on racetracks have closed down too.
As an example of the betting volume expected on the March Madness Tournament, in 2019, a total of $8.5 billion was wagered on these college basketball games. Now that all the European football leagues have closed operations for the foreseeable future, the NHL has shut down, the NFL has shut down, and the MLS has shut down, there is no viable sports betting industry in 2020 to speak of. In any given month, Las Vegas sportsbooks reel in $500 million in betting activity. The good news is that as soon as the US government and its European and Australasian partners get a grip on the virus and speculative sentiment is no longer overwhelmingly bearish, we may start to see a glimmer of hope on the field of play and at regulated sports books across the country.