French Gambling Performs in First Quarter
The COVID-19 outbreak has not significantly damaged the French Gambling market in the first three months of 2020, with many verticals showing growth. The industry is not out of the woods yet though. L’Autorité de Regulation des Jeux en Ligne (ARJEL) has warned that the effects of the pandemic will likely be seen in the coming months, rather than immediately.
The French regulator reported that gross gaming revenue (GGR) for the first three months of the year showed a 21.8% increase over the same period of the previous year. This increase represents revenue of €435 million over the period from the 1st of January to the 31st of March.
This development has been caused by a continued increase in income from sports betting. Horse racing in France has also shown some signs of recovery after recent losses. The stand-out performer, however, was poker, which generated income well above that seen previously.
Poker has historically been a low earner in the French market. This vertical has been growing in popularity over recent years, however, and this quarter has been no exception.
Record Breaking First Quarter
Previously, the highest amount generated in a single quarter in the French market stood at €86 million that was brought in during the first quarter of 2011. This quarter smashed this record after €98 million was made. This marks the biggest intake of cash since the French market was regulated and opened.
According to ARJEL, the growth in revenue seen in the poker vertical was mainly caused by the lockdown policy implemented by the government in the wake of the COVID-19 outbreak in Europe. The regulator attributes this to the coronavirus outbreak due to the abnormal growth over a two-week period that was seen.
The regulator stated that the increase of more than 180% for the last two-weeks of March compared to the same period in the previous year was unusual. This increase was mainly caused by tournaments, and by operators reacting quickly by allowing players to have private games with their friends. Tournament revenue grew 55.6% as a result of the lockdown.
The vertical also experienced growth in cash-based games, but this was not as significant. These grew 21.7%, up to €28 million. Another metric for growth is the mean number of accounts online in a week. This also saw growth, jumping to 374,000.
There coronavirus outbreak showed a clear effect on other verticals in the French market. One area that saw a significant impact of the lockdown was sports betting. Here, the amount of money being wagered dropped by 4.4%, down to €1.22 billion after the suspension of competitions.
There is a clear correlation between this decrease and the cancellation of the major sporting events in Europe. The suspensions of sporting events, particularly football, began after the 13th of March. This point marked the decline for sports betting during the quarter. In March, the amount of money wagered dropped by 40%, despite growing by 11% in the previous months.
Money wagered on football was one of the main areas within the sports betting vertical that saw significant losses. This fell to €635 million for the first quarter of 2020. The lost money from football gambling was mitigated, in part, by increased revenue from tennis and basketball.
Despite the lost money from football, the revenue from the sports betting vertical grew as a whole. This figure rose to €263 million during the first quarter. This increase represents an 18.5% rise over the previous year’s takings and marks a record for a single quarter in this area.
This record came as a result of outcomes that fell the way of the operators in France, according to ARJEL. The impact of the coronavirus outbreak was not to be discounted, however. The regulator stated that GGR for the vertical had been showing a 48% upward trend compared to the previous year’s results prior to the start of March.
Horse racing was another area that demonstrated growth in France during the first quarter of the year. Here, the amount of money that punters bet on races was up 9.9% on the previous year. This is interesting because racing in France was suspended on the 17th of March.
The increase in revenue seen in this vertical is therefore partially attributable to betting on foreign races during the lockdown. These races were added to the list of approved betting streams after the lockdown began as a means to help operators in France.
One of the critical things to focus on with the reports from the first quarter of the year is that only two weeks of this period were affected by the lockdown. The real impact of the coronavirus on the gambling landscape in France will not be seen until results are released for the second quarter of the year.
There is some hope, however, with sporting events such as racing and football coming back across Europe. The return of such events could provide an uplift, should the impact of lockdown be threatening operators.
The return of sports may not be smooth in some cases, however, with many in the industry expecting financial difficulties coming out of the other end of lockdown.