International edition
September 19, 2021

According to Ernst & Young report

Economic downturn continues to bring challenges to gaming sector

(UK).- The worldwide credit crunch, a plunge in revenues and a fall in share prices are causing severe stress for many global gaming companies, according to Ernst & Young’s “Reviewing the market: the 2009 global gaming bulletin”.


he annual report, which examines trends in the gaming industry around the world, also found that some forms of gambling have weathered the economic downturn better than others with many operators offering innovative, high quality products to customers.

Jim Bowden, senior manager in Ernst & Young UK's Betting and Gaming team, said, “A reduction in consumer confidence and disposable income has resulted in many global markets seeing a decrease in gaming revenues. Additionally, the tightening of the credit markets caused the deferral of major projects at destination gaming resorts. Operators around the world are studying very closely every aspect of their business models to ensure they are providing customers the services they demand.”

The study revealed that online gaming has traded robustly, with many operators in the bingo and lottery markets expanding their online presence.

Bowden explained, “Online games provide a form of escapism for people during the difficult times and the potential audience is huge - anyone who has an internet connection. The past year has seen continued growth and innovation in this area. Online games are a fun, cost effective alternative to other leisure activities during an economic downturn.”

In addition, some casinos have become more recession resistant than others. For instance, domestic operators around the world were affected less than destination-based facilities as consumers tried to manage their overall entertainment costs by limiting air travel to gaming resorts.

Some operators have also introduced new forms of gambling that have yet to face a recession. In the UK for instance, the growth of Fixed-Odds Betting Terminals (FOBTs) continues to be a major area of focus for bookmakers.  Many bookmakers claim that revenue generated from FOBTs now exceeds traditional over-the-counter gambling.

The bingo industry continues to be significantly impacted by smoking bans which have been implemented across several markets worldwide. This is a particular challenge since operators earn the most lucrative returns from gaming machines in the intervals between games, when most smokers go outside for a break.

Given that many operators in the industry have already taken steps to reduce costs to align themselves to the new regulatory environment, they could be well placed to emerge stronger as the upturn comes, according to the study.

Bowden concluded, “The gambling industry has long been considered recession-proof, but this is not the case globally.  However, there are rewards for those that see this recession through, particularly in light of the heightening deregulation of the betting and gaming markets worldwide and the prospect of further credit once the economy recovers.”

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