Lockdown Period Causes Rise in Online Gambling – Australia as a Case Study

Lockdown Period Causes Rise in Online Gambling

After a brief spell of easing restrictions, COVID-19 is back with a vengeance on Australian soil. The three-stage reopening plan started in May has been put on hold as cases surged across the states in July-August. With the lockdown already extended in most parts of Australia, businesses face an uncertain future.

Lockdown Period Causes Rise in Online Gambling

However, not all sectors are affected equally by the pandemic. In fact, some are thriving as the online economy takes centre stage. In a new era of social distancing and quarantines, Australians have naturally turned to online businesses for everything from essential supplies to entertainment. 

Any talk about entertainment in Australia would be incomplete without the inclusion of gambling. We are a country of gamblers with one of the highest per capita spent on gambling anywhere in the world. And when a country filled with gambling aficionados are locked out of casinos and their beloved pokies, who is it that gets to profit? Online gambling sites –that’s who!  

Demand for Online Casinos Overtakes Other Services?

If figures released by Australian credit bureau Illion in the early stages of the first lockdown are anything to go by, online gambling was the clear winner. When restaurants and cafes shut down, it led to a 63% spike in the use of food delivery apps like Menulog, Deliveroo and Uber Eats. 

Likewise, online retail firms like Amazon, eBay and Woolworth’s saw a marginally lower increase of 61% in transactions. Another huge winner during the crisis was online streaming and other digital subscriptions. Services like Netflix and Twitch saw unprecedented growth in viewership. This was reflected in the Illion survey, with a 61% increase in spending.

But the clear winner at 67% spike in demand was online gambling in Australia. And this spike was recorded within just one week of lockdowns. Unfortunately, this does not give a clear picture, as gambling in Australia involves sports betting, casinos, pokies, and other forms, some of which already had a significant online presence. To get a clearer picture we must first take a quick look at the impact of Coronavirus on the Australian gambling industry. 

The Cost of COVID 19 on the Australian Gambling Sector

During the first spell of COVID lockdowns, all casinos, gambling clubs, and other venues with pokies were forced to close shop. We are talking about a country where 80% of the adult population indulges in some form of gambling. 

Most of it is spent on gaming, casinos, and pokies, amounting to nearly $10,000 per person annually. The other two popular forms of betting – horse racing and sports, have only a limited impact in comparison – together accounting for $37 billion spent each year. For casinos, pokies, and gaming in general, that figure is a whopping $181 billion. 

These businesses together raked in $20 billion in revenues.  All of them were shut down for more than three months starting in March 2020. That means a loss of at least $5 billion due to the coronavirus. We say at least because these are all 2017 figures – even a conservative growth in gambling over the years would put the figure much higher than this. 

An Aussie Windfall for Offshore Gaming Websites

Before COVID 19, online gambling had a very rocky past in Australia. The governments have largely taken a hostile stance towards online casinos in particular, which are not allowed to operate on Australian soil. Sports betting, though, is fully legal and licensed.

But given the massive Australian appetite for gambling products online, there remained a plethora of offshore casino websites serving the Australian market. This was often in violation of the Interactive Gambling Act of 2001 (prohibition of all online gambling except sports betting and lotteries).

The law did not stop many Australians, particularly the younger demographics, from using these online sites and generating revenues of $400 million before COVID. This is mainly due to the government’s strategy of going after the sites by blocking them. There is no history of prosecution of players – only awareness campaigns about the risks.  

In the immediate aftermath of the lockdown, web traffic to popular offshore Australian casinos doubled, according to the Sydney Morning Herald. Web search for “online pokies” more than tripled, while requests for real money Australian casinos grew an incredible 540%. Likewise, ABC Australia reported that gamblers were calling addiction services to seek help in setting up online accounts to play pokies. 

The focus on pokies is quite natural, given that Australia has the largest number of these machines per capita – more than 200,000 across the country, or roughly one per 114 citizens. But according to some sources, the rise in online search queries surprisingly did not result in the highest spent on pokies at online casinos. It seems that many players opted for free play options and no deposit bonuses available through platforms like NoDepositKings instead.   

Is this a Sign of Things to Come?

Will the increased demand for online gambling sites during COVID lockdowns force the Australian government to do a rethink on its current stance? A quick look at some offline industry figures from July-August shows that this may be premature thinking. When casinos opened in June, their revenues bounced back instantly, despite social distancing measures reducing the number of players allowed inside the premises. 

But given the highly capricious nature of this pandemic, nothing can be taken for granted. We are already facing a fresh extension to the lockdowns. If infections continue to rise, the offline clubs and casinos may be forced to shut down once again. This will only bring further good news to online casinos serving the Australian market during COVID-19. This one could play out either way.