$15bn Increase in Australian Online Gambling
There has been a dramatic increased in the revenue generated at the Australian online casinos as customers migrate their gambling activities en masse. A reported 67% increase in online gambling is causing a seismic shift in the behavior of Australian punters, and the latest metrics released by industry regulators assessing the situation has highlighted the huge shift in consumer behavior in the wake of the COVID-19 pandemic.
Australia is witnessing a massive surge in online gambling spending, most of which is being directed towards unregulated services. This poses a serious risk to the authorities that are desperately trying to quantify this shift in spending, as the new business is flowing into unregulated vendors outside the normal set of jurisdictions and tax collection boundaries.
According to two companies involved in economic strategy, AlphaBeta and Illion, there has been a massive migration of spending behavior by around 250,000 Australians. With online gambling surging by up to 67%, along with huge increases in the amount being spent on alcohol and tobacco. These unprecedented times appear to be striking up serious changes to the regular spending patterns of the population as they seek new vices and alternatives to the traditional gambling options.
Whilst the casino industry has been hit hard in Australia, as we saw with Crown initiating huge layoffs, much of the business has shifted into the online medium. There has reportedly been a huge $15bn in total revenue siphoned off into offshore operators that are not subject to the same stringent guidelines enforced across Australia.
There are many people interested in this side of the pandemic fallout. Not only does it represent a huge business opportunity for firms that have established a high-quality online gambling infrastructure, but also as a psychological study, it goes a long way in determining the enthusiasm for gambling in times of economic difficulty.
The Allure of Offshore Online Gaming Operators
There are many offshore gambling companies specifically targeting the Australian market in its current state. They are all too aware of the situation ongoing across the industry, with land-based casinos shut down for the foreseeable future there is a huge untapped market of gamblers looking for alternatives. Coupled with the massive shutdown of formal working hours and people are becoming highly incentivized to gamble online with their newfound free time.
A popular business strategy utilized by these new offshore companies is through the usage of “free games”. Along with particularly aggressive marketing tactics, users are being drawn in by the thousands to experience these new and exciting products.
According to the TAB, one of the largest betting companies in Australia, there has been a marked increase in online gambling, which they claim to have forecasted at the beginning of the pandemic. Also, according to an executive director working for an industry watchdog, many of the games being played by Australians in the current climate are specifically designed to be addictive and hard to stop playing in nature.
An investigator researching this issue by the name of Prof. Samantha Thomas has shown particular determination uncovering the extent of the problem facing Australian gambling regulators. She made a statement on her Twitter account highlighting the key descriptive data, and commented,
We need urgent action on online gambling. Many of us predicted this would happen. Need a coordinated national response in order to prevent harm from these products.Ken Barton, Chief Executive Officer, Crown Resorts Ltd.
For those following the specific betting trends in the wake of the crisis, there have been several points of interest. Notably, the sports betting fixtures being played in Russia and Belarus have received huge increases in the amount of money being wagered by foreign gamblers. This is easily explained with one quick glance across the global sporting calendar that has been all but decimated in response to government lockdowns.
The situation in Australia has drawn a lot of attention to its lack of a regulated online gambling infrastructure. In countries such as the United Kingdom and Spain where there are already many licensed operators operating online, the transition has not led to such a seismic economic shift, as the revenues are still flowing through licensed tax-paying operators.
Following this pandemic, there may be a need for Australia to revisit the gambling laws of their country, and relax the harsh restrictions against online sports betting. If this is not something on the future ambitions of the government, then they may have to come to terms with the fact that millions of dollars will be flowing outside of their tax collection remit into offshore unregulated companies.