Are Online Gaming Companies Benefiting From the Pandemic?

Laptop With Casino Graphic and Coronavirus Background

You only need to glance at the news headlines to see that people who have been forced to stay home are playing a lot of games online. It seems like the gaming industries should be very happy with all these new players.

But there is a cloud around the silver lining.

Recreational gaming has always kept the kids happy and at home. While they may be streaming more movies, TV shows, and game sessions online now they don’t have to go to school they are still doing what they’ve always done.

Adult gaming veterans may have seen a change in their favorite venues. More players are showing up for poker games. And some casinos have shut down to protect their employees.

Beyond that what does the public really know about how the real money online gambling industry is doing?

Some Governments Cracked Down on Online Gambling

It hardly seems fair but almost as soon as everyone was ordered to stay at home some governments imposed strict limits on online gambling. It’s no shock to outsiders that Chinese gamblers who could not get to Macau casinos during the pandemic have been unable to gamble online.

China has always forbidden online gambling. There may be a few million Chinese players who sneak past the firewalls but online casinos won’t benefit much from the Chinese market.

Macau Casino Skyline

Europe has been very friendly to online gambling for years. And yet recent news stories say that countries like Sweden are starting to crack down on the industry.

The problem for gamers and casinos alike is that the world has entered a global recession. Europe may be handling things differently from the United States but people have less money to spend now than they did a few months ago.

Sportsbooks Have Suffered an Industry-Wide Shock

Although sports betting is not technically gaming it is closely aligned with the online casino industry. Some online casinos offer their own sportsbooks but many players use enjoy both kinds of betting.

And many European sportsbooks have shut down because of the pandemic.

A few sportsbooks have shifted over to the sports market. Esports are still booming and bettors are willing to wager money on those games. Some online casinos and sportsbooks had already embraced esports.

The future looks bright for esports betting because many more people have now learned about this option. Those who have the money to gamble won’t stop just because they are staying at home.

The real question concerns how many of the shuttered sportsbooks will come back when the major leagues begin playing games again.

The pandemic created an opportunity for betting exchanges, too. Bettors who set up their own wagers were bypassing the bookies more and more anyway. While it takes time to come up to speed on these apps, they are here to stay.

Sports betting seems to be healthy but the companies that were big names in the field only a few months ago may never recover their dominant positions.

Game Vending Platforms Like Steam Are Enjoying a Boost

Anyone who plays online games of any type has probably heard about Steam. Chances are you’ve downloaded a few games on the platform. They offer every type of game you can imagine, including Vegas-style free slot and casino games.

Some people have always enjoyed playing free casino games and the general public probably plays more casino simulations through family-friendly game venues than those offered by the online pay-for-play casinos.

The gaming platforms haven’t missed out on what’s happening. They’ve always kept robust libraries of older games available for pennies on the dollar, compared to the games’ original prices.

Steam Logo and Games

People living on part-time income, unemployment benefits, or savings may be more willing to buy a $1 free game than to drop $1000 into an online casino account.

The game apps in mobile phone app stores are also popular. My cellular company has added free bandwidth to my account twice in the past month. As more people take advantage of cheap mobile bandwidth they’ll be playing more mobile games.

The online casinos that offer high-quality mobile games are in a great position to attract more new players.

The Internet Has Never Seen So Much Recreational Use

Although fewer news stories mention the problem now than a few weeks ago, millions of people complained about slow Internet speeds almost as soon as they were sent home.

The last-mile providers were unprepared for the onslaught of extra demand for their services. Their networks began to degrade in some areas. Some people have complained about having only 5% of the download speeds they were used to prior to the pandemic.

Slow download times translates into disrupted gameplay. Whether online slots or mahjong, players had to cut back on any game they couldn’t fully enjoy. This isn’t a problem your gaming provider can solve by installing new servers.

It looks like some Internet providers have upgraded customer accounts to give them better service. Even so, the bottom line here is that some people won’t be able to enjoy online gaming because they don’t have the Internet access they need.

In fact, families in rural areas and small towns who have been told to stay home may not have much Internet access at all. This problem has become an issue for school systems that cannot reach all their students online.

If the kids can’t log into online classes they can’t play games and their parents can’t play games. These people may never have gambled online before and they’re not gambling online now.

American Online Gambling Has Exploded

The United States has some of the most convoluted gambling laws in the world. In a nation with more than 1,000 land-based casinos, the majority of states actually don’t allow casinos. Most USA casinos are built on Native American lands, which are only regulated by the federal government, not the states.

A handful of states have passed laws allowing their commercial casinos to offer online gambling – but only to their state residents. You can sign up for casino accounts in Pennsylvania, New Jersey, Delaware, and other states. And yet you can only play their games for money if you are physically in those states.

What this means is those state-licensed casinos have captive audiences among their local residents but they are locked out from the rest of the American players who want to gamble online.

That leaves most players with only one option: they must seek out online casinos based outside the United States.

And not every online casino is considered “US-friendly”. The European casinos that block U.S. players are not gaining any new customers, and some of them have reportedly experienced downturns in revenue.

This is the cruelest irony: that millions of people want to play online and they cannot because their own governments and gambling-friendly governments overseas won’t allow them to.

Players With Limited Funds Are Looking for Deals

The days of free online bonus offers may be over. There was a time when a player could sign up for dozens of free accounts, get $10 to $25, and play for real money for free. But as more players abused the system and as online casinos became more popular with real money depositors those free offers began to vanish.

Online casinos expect players to deposit money before qualifying for house credit. And they impose limits on how much you can withdraw. They’re not in the business of giving money away no matter how much it feels like they may be.

Star Clusters Online Slots

Anyone who wants to gamble but who has lost their job and is waiting for government assistance won’t have much money to spend. It’s better if they stick to free games than bet the rent check on the slots.

The economic disaster of the pandemic doesn’t create as big a windfall for online gambling companies as one might expect. They are surely getting more signups and deposits but people who are waiting in food lines in the USA are not playing online blackjack for real money.

Many Software Developers Have Lost Their Jobs

While most of these people have few or no skills of use to the gaming industry, some of them will probably try to break into the field. If the gambling game developers are hiring they won’t lack for applicants.

An injection of new blood into the industry should be good for everyone.

Some wily investors may be looking for opportunities to start up new online gaming companies. Now will be the time for them to pick through resumes. They’ll never see more qualified technical people on the market.

Although I can’t promise you’ll see new gaming companies appear anytime in the near future, I’ll be surprised if no new brands have come online a year from now.

The pool of available talent has exploded. Any company that is still profitable will be taking a serious look at upgrading their staff if they can see a way to grow.

Conclusion

It feels like a boom time for online gaming in every category. But people who aren’t sure about their financial futures will be less likely to start gambling or buying new games than if they knew they were going to be okay.

In any economic downturn there is always a segment of the population – a small percentage – who decide to try their luck with gambling. Online casinos may see a strong growth spurt for several months. And maybe in the long run online gambling will lose some of its stigma, leading to an eventual second wave of growth even bigger than what is happening now.