Betting Markets Suggest Olympics Cancellation
The 2020 Summer Olympics in Tokyo has been thrown into jeopardy following COVID-19 outbreak. With betting odds suggesting the games won’t go ahead as planned. There are major concerns over the safety of the public due to the dangers of Coronavirus. Odds markets being offered at sportsbooks across the world this weekend shifted in favor of a disruption to the Tokyo Olympics at an implied probability of 56.5%.
The International Olympic Committee are facing a tough few weeks as the time for a critical decision on whether to go ahead or make special arrangements is imminent. Global betting markets have recently shifted in favor of canceling or postponing the games. ©Free-Photos/Pixabay
The dramatic shift in odds for the Olympics going ahead as planned has shocked the global betting markets. The speed at which this shift occurred is the most concerning aspect. Between the 25th February and beginning of March, cancellation or postponement odds for the Tokyo Olympics have jumped from an implied probability of 10%, rising rapidly to around 57%.
According to the longest-serving member of the International Olympic Committee, Dick Pound, it is highly likely that the Olympics will be canceled due to the fallout from Coronavirus. There is a time-pressure to the decision whether or not to proceed with the planned schedule, and analysts estimate that the organizing committee will need to confirm, cancel or delay the games by the end of April.
In terms of crisis management, there are few events that have as many challenges as the Olympics. There are many moving parts involved in the organization of the games, and it may be practically impossible to relocate or postpone the games.
In the Meantime Japan Playing It Safe
Professional sport in Asia, and especially in Japan has been severely impacted since the virus began to spread. All professional football league matches have been canceled until mid-March, and the planned training of 80,000 Olympic volunteers has been pushed back by 2-months. The Japanese government has also imposed closures on the majority of public schools, and curtailed the organization of any large public gatherings.
The rhetoric coming from the International Olympic Committee has been consistent. With Thomas Bach, the head of the IOC reiterating that everyone is still preparing to deliver a successful Olympic Games.
The British Olympic Association became caught up in the quagmire, as a Conservative London Mayoral candidate said organizers should seriously consider relocating the games to London. Causing great offense to the Japanese, the British Olympic Association had to take it upon themselves to contact the Tokyo organizing committee and the IOC to formally apologize and confirm that these opinions did not reflect the view of British Sport.
Discussing the need for a critical decision to be made soon, and recognizing the need for athletes to have a clear schedule in mind, Dick Pound commented:
A lot of things have to start happening. You’ve got to start ramping up your security, your food, the Olympic Village, the hotels. As far as we know right now, we’re going to be in Tokyo. The IOC is not going to send athletes into a pandemic.Dick Pound, International Olympic Committee, Board Member
Japan Desperate for Games to Go Ahead
As a betting man, you may want to back the Japanese government to overcome these roadblocks and deliver a successful Olympic Games. An internal audit has revealed the enormous financial commitment of $24 billion – that Japan has already spent to host and prepare for the games. Given this huge level of exposure, any calls for cancellation are going to be met with aggressive resistance.
Another possibility would be offering a hollowed-out Olympics, with empty stadiums, closed-off arenas and very few spectator opportunities. In this scenario, the games would still go ahead, but would be seen largely as a betrayal of the Olympic spirit due to the behind-closed-doors aspect.
With TV rights revenues playing such an important role in the International Olympic Committee’s budget preparations, it is actually rather likely this is the situation that will play out. Revenues would still be captured through TV deals, the world will be able to enjoy the games, and the athletes will have an opportunity to compete. Similar to the situation at the Tokyo marathon this month, a restricted event that only featured elite athletes and no spectators went ahead as concerns for public safety was too high.
Rather than canceling the games altogether, the IOC will likely find a middle-ground where the world can still enjoy a Summer Olympic Games, whilst minimizing the risk to public safety. Whilst many possibilities still remain viable, odds makers are slowly tipping their scales towards outright cancellation as the global economic upheaval by Coronavirus worsens.
