Danish Gambling Revenue Fell Over First Half of 2020
Revenue for gambling market in Denmark dropped by 19.2% in the first half of the year compared to results over the same period of 2019. The drop in the amount of money generated during the past six months has been attributed to the outbreak of the COVID-19 pandemic, which has caused havoc to markets across Europe and has impacted operators over the continent. The pandemic negatively impacted the contribution of both physical gambling locations and sports betting to revenue.
The outbreak of COVID-19 caused the closure of physical gambling locations and fixed odds gambling machines. This, coupled with the lack of migration towards online offerings has left the Danish gambling market in a bad position, as it has posted decreased revenue in the first half. ©stokpic/Pixabay
Spillemyndigheden, the Danish gambling regulator, has recently released a financial report for the first six months of the year. This year has been a tough period for many businesses globally as economies plunge into recession following the outbreak of the coronavirus pandemic. The virus has caused the revenue generated in the Danish gambling market to drop to DKK2.7 billion in the months leading up to the 30th of June.
When the figures for the period are broken down, it can be seen that the largest drops in revenue stemmed from the brick and mortar casinos that are operated by Danske Spil. These, alongside the fixed-odds machines that are owned by the operator had a sub-par first half of the year owing to the lockdown and social distancing measures that were implemented by the government.
For casinos in the country, revenue dropped to DKK82 million; a decrease of more than 50%. As for the fixed odds gambling machines across Denmark, the amount of money taken also fell. Here the loss was less pronounced, but still significant. Revenue dropped to DKK1.0 billion over the first half of the 2020, a decline of 46.6% on the results from the same period of 2019.
These were not the only verticals to feel the strain of the pandemic. Sports betting was also disrupted significantly due to the widescale cancelations and postponements of sports matches. As a result of the uncertainty surrounding this market and the limited options for betting that were subsequently offered to consumers, the revenue for this vertical declined to DKK1.01 billion, a drop of 19.6 compared to the takings in the first half of 2019.
There was just one vertical in Denmark that did not get significantly impacted by the pandemic. Online casino games in the country were able to continue as normal, unimpeded by government policies that aimed to reduce the transmission of the disease. This vertical was also the only area of the Danish gambling market that reported growth compared to the previous year.
Online casino games in the country recorded revenues of DKK1.23 billion. This represents a slight increase of 2.8% compared to the same time frame in 2019. Whilst this is just a small rise on the takings of the previous year, this is especially significant considering the difficulties that all areas of the economy have faced as a result of the government mandated lockdown policies.
Difficult First Quarter
The recent revelations about the figures over the past six months in Denmark have followed underwhelming first quarter financial reports for 2020. Earlier in the year, it was announced that during the first three months of 2020 there was a 5.0% drop in the amount of money that had been taken across the entire market compared to the first three months of 2019.
It was during the first quarter that the government began to implement the policies that would see traditional gambling options in Denmark closed to the public. These closures did not translate to an increased popularity of online gambling in the country, ultimately leading to declining revenues for the period.
During the first quarter, the total revenue across all verticals in the country declined to DKK1.53 billion. Online casino did account for the second largest amount of money from revenue streams in Denmark. This vertical brought in DKK555.1 million, but despite the seeming success for online casino, this figure is still 1.1% lower than the amount that was generated in the first quarter of 2019.
Online slots made up the large majority of the money that was generated from internet gambling in Denmark in the first quarter. This vertical took DKK410.5 million, which represents 75% of the total amount generated from online gambling, a rise of 2.5% on the first quarter of 2019. Other verticals, such as roulette, had a less successful quarter, with revenue falling by 11% to DKK50.3 million.
Lack of Progress in Second Quarter
There wasn’t a significant upturn in the revenue generated in the market during the second quarter of the year that could offset the disappointing first quarter takings. During this three-month period, the largest contributing revenue stream was again online casino, which brought in DKK673.0 million, a 6.2% yearly rise.
This may appear to the untrained eye as evidence that there has been a migration of players from physical gambling locations to online gambling as a result of the lockdown policy. The country’s regulator took care to emphasize that this is not the case, however. According to the authority, this is merely growth that has been occurring naturally in the market since 2018 and is, in fact, a lower rate of growth than was expected based on the results of previous years.
Of the online casino revenue that was taken, slots once again made up the lion’s share. The revenue that slots made amounted to DKK495 million over the quarter, which represents 73.5% of total taken for internet casino games. The previously mentioned figures show that this market share is a slight decrease on the first quarter results, and was partially caused by an uptick in the amount of roulette that was played, which grew to 9.7% of the market.
During this quarter, there was a sharp decline in the amount of money wagered on sports. Here, revenue fell to DKK373 million, which is a 41.3% drop compared to the takings of the second quarter of 2019. This was due, in no small part, to the cancelation and postponement of nearly all sports during the height of the lockdown.
Unsurprisingly though, the largest declines in revenues were reported in the physical gambling sector. The revenue from physical casinos took a nose dive to the tune of 83.0%, as these locations brought in just DKK16 million over the period. Gaming machines also fared badly, generating just DKK99 million, a year-on-year decline of 72.9%.
Despite this largely negative six months for the gambling market in Denmark, there are some positives to take home. As previously mentioned, despite the falling revenues, there is the silver lining that the number of people gambling didn’t increase dramatically, and, as such, neither did the amount of problem gambling.
This was a concern voiced by many across Europe when lockdowns were first announced on the continent and the Danish regulator even went so far as to encourage the citizens of the country to use government initiatives such as a register for people to join to exclude themselves from gambling should the pressures of the pandemic prove detrimental to people’s attempts to bet less.
Whilst many did sign up to use this service and the national problem gambling hotline, it does not seem as though there was a significant rise in these figures as a result of the pandemic.
