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Gambling revenues: Europe on the road to recovery?

It’s been a busy time for financial results within the gambling industry, with the likes of Flutter Entertainment, Entain, 888 Holdings, LeoVegas, NeoGames and Table Trac all publishing either Q2 or H1 2022 results last week alone.

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It’s been a busy time for financial results within the gambling industry, with the likes of Flutter Entertainment, Entain, 888 Holdings, LeoVegas, NeoGames and Table Trac all publishing either Q2 or H1 2022 results last week alone.

But these results have not all been favourable, with many companies continuing to fight against the implications caused by the Covid-19 pandemic, while others have struggled for various other reasons.

Narrowing the lens solely on Europe, however, and the situation is certainly a promising one when compared to this time last year; at least when it comes to analysing the countries involved, as opposed to singling out specific companies.

The majority of the continent is now ‘living with the virus,’ in that the most severe restrictions have all but disappeared across the continent. The lifting of such restrictions, coupled with a shift to online, has resulted in many positive financial results for different countries across Europe.

A total of five countries in the region have posted positive year-on-year changes in either their Q2 or H1 results in the last few months, with Lithuania most recently reporting a 66% increase in gambling revenue for the first half of 2022 to €89.3m ($91.8m).

The results, published by Lithuania’s Gambling Supervisory Authority earlier this month, were aided by customers returning to land-based venues following the removal of Covid-19 restrictions. Such sanctions had meant casinos, slot machines and betting and totalisator points were not allowed to open or operate.

Land-based revenue alone accounted for €34.7m of the total revenue, soaring by over 1,000% from €2.8m in 2021 to €34.7m in 2022.

June saw another European country post a year-on-year increase, with Denmark reporting a 20% climb in gross gaming revenue (GGR) for the industry for Q1 2022.

As reported by the Danish Gambling Authority, revenue from betting, online casinos, gaming machines and land-based casinos amounted to DDK$1.5bn ($210m). The figure came after the lifting of restrictions in the country, with casinos and gambling arcades shut during Q1 2021, but open for the majority of Q1 2022.

Back to this month and Portugal’s licensed operators also reported a rise in GGR, which increased 17% year-on-year to €146.4m.

It was a similar story for France in April this year, with the country’s National Gaming Authority (ANJ) reporting €10.7bn in revenue for 2021, up 7% from 2020. The body noted that a shift to online and the easing of public health measures has set the nation’s gaming industry on the road to recovery, with the year-on-year increase in revenue driven particularly by an “enthusiasm for online sports betting.”

While many European nations are enjoying the limelight on their road to recovery, the US is ensuring that they can also join in on the fun, with the American Gaming Association (AGA) last week reporting that Q2 commercial gaming revenue rose by 3% from Q4 2021, totalling $14.81bn

The UK market also posted successful results this month, with the Gambling Commission reporting online gross gambling yield (GGY) of £1.2bn ($1.44bn) for Q1 (April 2022 to June 2022), an increase of almost 1% from Q4 (January 2022 to March 2022).

It’s important to note here that, as such a mature market, significant year-on-year changes – either positive or negative – perhaps can no longer be expected in the UK.

That said, slots GGY increased by 4% to almost £565m, the number of online slots sessions lasting longer than an hour increased by 5% to 8.4 million, and Licensed Betting Operators (LBO) GGY increased by 6% to £584m, all of which will be extremely welcome news to the UK gambling industry as a whole.

Not all groups operating in the UK were on the right side of the line, however, with 888 earlier this month noting that the company’s relatively stable revenues for the six months ended 30 June 2022 were offset by declines in the UK, with the 25% decline “reflecting the implementation of more stringent safer gambling policies.” 888 CEO Itai Pazner added: “The group’s financial performance in the period primarily reflects market conditions in the UK.”

While many European nations are enjoying the limelight on the road to recovery, the US is ensuring it can also join in on the fun, with the American Gaming Association (AGA) last week reporting that Q2 commercial gaming revenue rose by 3% from Q4 2021, totalling $14.81bn.

There is, of course, an area on the map on the other end of the spectrum, with Asia struggling massively amid heavy restrictions. It is seemingly a region that is certainly not ‘living with the virus,’ with China in particular trying to achieve zero Covid.

Neighbouring Macau has followed suit. Last month, the region saw its worst Covid-19 outbreak since the pandemic began, and while things are thankfully improving, the stringent lockdown measures in place at the time have unsurprisingly taken their toll on the gaming industry.

As noted by the Gaming Inspection and Coordination Bureau (DICJ), revenue for July fell a massive 95% year-on-year to MOP$398m (US$49m), the worst monthly performance recorded since the pandemic began.

Turning back towards Europe, though, and it’s a much brighter situation. Impressively, the positive figures come despite increasing regulation across the continent, with many countries adopting more stringent safer gambling policies.

With Q3 and H2 2022 coming up, it will be interesting to see if the aforementioned countries – and indeed their neighbours – continue on an upward trajectory, or if they will be hindered by further regulation. The impact of such regulation will, of course, be intertwined with the potential situation whereby many bettors are perhaps feeling comfortable enough to return to land-based venues, alongside the many gamblers who have switched to online.

Overall, it’s been a long road to recovery and, for many, the arduous journey is far from over. But positive signs are here, with many nations now hopeful of at least being in sight of the light at the end of the tunnel.

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