The COVID-19 pandemic which started in Wuhan city in China at the end of December, 2019 and after just a few months has spread to more than 200 countries around the world, has caught the world by surprise and has caused unprecedented consequences to the global economy and the daily life of particularly every person on Earth. Due to the plandemic, global GDP would shrink by 2% in the best pandemic-response scenario and by 4% in the worst case with domestic services and tourism as the most seriously affected economic sectors. In Australia, there have been nearly 30,000 confirmed COVID-19 cases and hundreds of COVID-19 related deaths. Due to the pandemic, Australian GDP fell by 7% in the second quarter of 2020, and the country’s GDP could decrease by 15% this year, experiencing the first recession in nearly 30 years.
Within this context, it is inevitable that the Australian gaming sector will also take a hit in 2020 and even beyond. This article investigates the impacts of COVID-19 on Australia’s land-based gaming operators and individual gambling players.
Impacts of COVID-19 on Australian traditional land-based gaming operators
Permitted land-based gaming in Australia includes such activities as lotteries, casinos, wagering, and gaming machine. The total revenue from the industry was estimated at $218.8 billion in 2017-2018 (Queensland Government Statistician's Office, 2019). Due to strict regulations of Australian government, there are only several major land-based operators in this sector including the Star Entertainment Group Limited, Crown Resorts Limited, SkyCity Entertainment Limited, Federal Group, Casino Austria International, etc. With the onset of COVID-19 pandemic, the sector has suffered several direct and indirect impacts.
- Land-based gaming operators’ shutdown as mandated by the government
First, as a response to the highly infectious disease, throughout 2020 in almost all Australian states and territory, the government has intermittently ordered to close public places and non-essential businesses and services, and in some cases even imposed strict lockdown with curfews from 8pm to 5am (The Guardian, 2020). Hence, for land-based gaming operators, they have to physically shut down their venues including hotels, casinos, clubs, sports activities and related betting games etc. and suspend the majority of their business activities.
- Revenue loss due to the shrinking tourism industry
Second, gaming industry highly depends on tourists and tourism industry which also recorded a considerable drop this year. Casino tourism has been one of the major attractions of Australia to lure both domestic and international visitors. It was reported that nearly 20% of foreign tourists visited a casino and spent about $4941 per person, (Australia Tourism & Transport Forum , 2011). With travel restrictions within the country and internationally, the number of international visitors to Australia in the first 6 months of 2020 fell by 27.9% compared to the same period in 2019 (IBISWorld, 2020). As a result, gaming operators can expect to have fewer visitors frequent their facilities and spend a much lower amount than before.
- Biggest land-based gaming operators’ operational loss
Facing with enormous challenges as indicated, Australian land-based gaming operators have claimed revenue and profitability loss and anticipated more difficulties ahead. To illustrate, despite a strong growth over the period of July 2019 – February 2020, from March 23rd, 2020 when the effects of COVID-19 could be felt strongly in Australia, the Star Entertainment Group Limited had to shut down all of their properties. On some occasions when the government loosened some COVID-19 response measurement, the company could resume some activities but with very tight restriction. For instance, it reopened its facilities in Sydney in June with maximum patrons of 500, and in Queensland in July. Consequently, the company reported a revenue of $1.49 billion for the fiscal year ending in June 2020, down 31.1% compared to the previous year. Domestic revenue and international rebate were down 24.1% and 51.3% respectively. To sustain the business, the company took various actions to cut costs such as looking for new funding, reducing overhead costs and expenses, standing down 8,500 employees, rescheduling debts and applying for government pandemic financial assistance (The Star Entertainment Group, 2020).
Similarly, Crown Resorts Limited also noted a decrease of 25.7% in revenue leading to a 40.6% decreasing in its reported earnings before taxes. With the mandated closure of its properties since March 2020, the company had to stand down almost 95% of its workforce and request assistance from the government’s JobKeeper initiative for Crown Melbourne and Crown Perth (Crown Resorts Limited , 2020).
Impacts of COVID-19 on individual gamblers
Gaming is among the most popular recreational activities among Aussies and attracted nearly 7 million regular players, or around 40% of total Australian population. In 2017-2018, per capita gambling expenditure was around $1,292, and most people lost money to gambling. Australian people spent the most on gaming machines, followed by casino, and lotto (Queensland Government Statistician's Office, 2019). Australian people often participated in gaming to seek financial gains, regulate their emotions in the form of escapicism, and socialize. In the aftermath of the COVID-19 pandemic, individual gamblers have been affected in very different ways.
- Casual gamblers have fewer opportunities to gamble and spend less
Due to COVID-19 containment measures, there are fewer opportunities for Australian people to gamble, and many gamblers, especially recreational and occasional gamblers perceive this positively. Because social distancing is in place in most cities, racing and other sports activities were banned and other land-based gambling facilities had to shut down, making it impossible for betting and other related gaming operations. Additionally, according to the law, people residing within Australian states and its territory are allowed to only a few types online gaming including online pokie, online Bingo, etc., limiting their chances to participate in this form of gaming (Australian Gambling, 2020). A study on the impact of COVID-19 on gambling behaviours of Australians concluded that 75% of the survey participants claimed to gamble less in terms of both frequency and spending during the lockdown time.
Since, for many households, gambling can put a financial stress on the family relationships ranging from arguments, doubts, anxiety, to mental breakdown, abuse, and even divorce and suicidal attempts, this break from gambling came as a relief (Dowling, 2014).
- Serious gamblers suffer more financial loss
On the other hand, stresses, boredom of lockdown and concern over financial security and job loss are stated to cause serious issues to problem gamblers. First, online gambling surged during lockdown period in Australia. A report by AlphaBeta indicated that weekly spending on online casinos and poker – illegal activities in Australia – has surged 20% - 40% since April 2020, the time when land-based operators were required to close (AlphaBeta, 2020). Second, although COVID-19 might lower the frequency of gambling, problem gamblers spend more, and possibly lose more, each time they gamble, and many people acknowledge that they will resume their gaming habits as before when the pandemic is over. For instance, as Queensland eased their COVID-19 restrictions since July 3rd, enabling gaming operators to recommence their operation, some operators in Queensland registered significant increase in their revenues (The Star Entertainment Group, 2020).
AlphaBeta, 2020. COVID-19 Economic Impact Real-Time Tracking. [Online]
Available at: https://www.alphabeta.com/illiontracking
[Accessed September 2020].
Australia Tourism & Transport Forum , 2011. Submission to the Joint Select Committee on Gambling Reform, Sydney: Australia Tourism & Transport Forum .
Australian Gambling, 2020. Australian Online Gambling Laws. [Online]
Available at: https://www.australiangambling.lv/australian-gambling-laws/
[Accessed September 2020].
Crown Resorts Limited , 2020. 2020 Full Year Financial Results , Southbank: Crown Resorts Limited .
Dowling, N., 2014. The impact of gambling problems on families, Melbourne: Australian Institute of Family Studies.
IBISWorld, 2020. Tourism in Australia, Melbourne: IBISWorld.
Queensland Government Statistician's Office, 2019. Australian Gambling Statistics, Queensland: Queensland Treasury.
The Guardian, 2020. Australia coronavirus shutdown: what is open, closed and banned under the current rules?. [Online]
Available at: https://www.theguardian.com/australia-news/2020/mar/30/australia-coronavirus-shutdown-rules-stage-3-not-lockdown-what-is-closed-open-restrictions
[Accessed September 2020].
The Star Entertainment Group, 2020. The Star Entertainment Group Limited Full Year Financial Results for the Year Ended 30 June 2020, Brisbane: The Star Entertainment Group Limited.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.