Australian Gambling Industry Fifth Worst-Hit in the World
The ongoing COVID-19 pandemic is ravaging businesses around the world. The Australian gambling industry is being battered by from all sides and is severely struggling. It is the fifth worst-hit by the COVID-19 virus in the entire world, according to a recent report.
Australian gambling companies usually make vast sums of money. Gambling is in Australians’ DNA, they love nothing more than a flutter on the horses or playing pokies. The COVID-19 virus forced the closure of all non-essential businesses in Australia and around the world. Casinos, bars, clubs, and sports books are considered non-essential.
These venues have started to reopen but the damage, especially financially, is already done. Aussie casinos burned through $14.2 million daily while they were closed. Only Nevada, Canada, Singapore and the pachinko market in Japan fared worst than the Australian gambling sector.
Star Entertainment, Crown Resorts, and Tacorp are three of our biggest gambling companies. All three reported losses or significant reductions in profits.
Australian Gambling Sector Crippled By Coronavirus
Star Entertainment revealed it lost $94.6 million during the most current financial year. The company made $198 million profit in 2019 for comparison. It attempted to cut costs after the enforced closures, but not accepting customers was a costly business.
The company laid off 90% of its staff but still had massive overheads. It has since opened for business although attendance figures and net spend as still recovering.
Australian gambling giant Tabcorp operates gaming and lotteries. It has also been hard hit by the coronavirus. Tabcorp has massive debts and these ate into the company’s available funds.
Total revenue for the company fell by 4.8% to $5.22 billion. Tabcorp lost $870 million over the year, which is a massive sum to watch disappear into the ether. Its board of directors are now looking to raise some capital through an accelerated entitlement offer. They hope to raise as much as $600 million.
Crown Resorts is the latest Australian gambling company to reveal disappointing financial figures. Revenue dropped like a stone by 25.7%. It still managed to make a profit, however, although it fell from $401.8 million to $79.5 million an 80% reduction.
Crown’s plight continues because its Melbourne property is still under lock and key. Metropolitan Melbourne is under Stage 4 lockdown restrictions, meaning the massive casino and hotel cannot accept customers.
Closure costs for Crown weighed in at $81.6 million despite standing down 11,500 of its employees.
Time For Australian Casinos to Launch Online Products?
National Australia Bank released transaction data from June showing Australians flocked to online casinos. Australians spend 62.7% more at online gambling sites than in June 2019.
Crown’s financial figures back these numbers up. It has a digital presence, one that saw it make $25.3 million, up 30.9% from 2019 when it made 19.3 million. The company owns 100% of Betfair Australia and 85% of DGN Games.
Now is the time for Australian gambling companies to embrace the changing landscape and launch online products. Online poker and online casinos often appear in the headlines for the wrong reasons. Australia’s archaic internet gambling laws essentially force its residents to play on offshore gambling sites.
The Australian government is missing out on tens of millions worth of tax revenue by not having regulated online gambling. It’s possible to put measures in place to help prevent problem and underage gambling. This protects Australians from unscrupulous gambling companies.
The COVID-19 virus isn’t going anywhere fast and industries have to react quickly and adapt. Those Australian gambling companies completely reliant on customers walking in and using their products are in great danger of completely failing. Having an online presence makes sense for them, at least financially.