The coronavirus pandemic has dealt a blow to the legal sports-betting industry that was poised to take off in the US in 2020.
Major sporting events, including the college-basketball betting frenzy known as March Madness, have been canceled. Others, like the NBA, NHL, and MLB seasons, are on hold.
Sports-betting companies, and the media businesses that had been rushing to capitalize on the industry, are now cutting costs to keep their businesses afloat and finding creative ways to keep fans entertained while much of the sports world is in limbo, industry insiders told Business Insider.
For some sports betting and media companies the name of the game right now is cutting costs and conserving capital.
Product launches that had been planned around major sporting moments like March Madness or MLB's opening day are being paused. Some marketing campaigns are also being pushed. "Everybody is hunkering down and preparing contingency plans to keep their businesses operating," said one industry advisor, who has advised multiple media companies that are moving into sports betting. "They're thinking through how to, frankly, preserve their employee bases and trying to avoid having to lay people off."
Read the full story about how the sports-betting industry is responding: Sports-betting insiders say companies are in 'triage mode,' cutting costs and getting creative to keep fans interested until live sports return
Physical sportsbook operators are in the toughest spot, because they own massive casinos and retail locations that have mostly been shut down.
"They don't have any customers now," said Chris Bevilacqua, cofounder of Bevilacqua Helfant Ventures, an advisory and investment firm for the sports and entertainment industries. "A lot are going to undergo some financial hardship."
"They don't have any customers now," said Chris Bevilacqua, cofounder of Bevilacqua Helfant Ventures, an advisory and investment firm for the sports and entertainment industries. "A lot are going to undergo some financial hardship."
Online-gaming providers, including daily-fantasy-sports companies FanDuel and DraftKings, are leaning on their daily-fantasy businesses to weather the rough economic climate. They're launching betting pools around topics like politics or TV shows. And they're looking to smaller or international events that are still playing, like horse racing, rugby, or Australian A-League soccer.
Sports leagues and associations, like NASCAR, are starting to turn to video-game simulations or esports in lieu of in-person events, which could provide new betting opportunities as well.
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