The virus COVID-19 has now transcended everything else, be it Brexit, a UK trade deal with the USA, the election of a President in the USA, and the continuing problems in the Middle East.
Mohammed El -Erian, the Chief Economic Advisor to Allianz, told Bloomberg the cycle will move in four phases.
Phase One: Economic and corporate shock. Global growth slows, business costs rise, disruption in supplies.
Phase Two: Overlaps with phase one. Financial disruption leading to distressed selling, shortage of liquidity, closure of funding leaving only banks to fill the gap.
Phase Three: The formation of a bottom in the market.
Phase Four: Will be determined on how successful the world is at containing the virus, finding a vaccine, and eradicating it. A great deal of store has been placed in a hot summer seeing it off. There have been 108 people infected in Singapore up to March 3 and the temperature was hovering around 30C. So don’t bet on it.
According to Mohammed El-Erian we have already arrived at phase two, and the financial markets of Monday 9 March onwards confirms it.
So where does this leave gambling? The casinos in Macau closed on February 3 for fifteen days, but have now started to open again, gradually. Italy postponed three Serie A games following the death of two people infected with the virus. G2E Asia has been postponed from May 19 to July 28. More and more sports events are being cancelled.
UEFA is considering calling off the European Football Championship. Euro 2020 matches will take place in 12 different cities, involving 24 teams, stretching across the entire continent with thousands of fans travelling from one country to the next.
Governments have been placed in an unenviable position. They can close towns, public meetings, football matches and racecourses in the hope it will contain the virus. The China policy. But it will trash the economy in the process. It may save lives, but there is no certainty on that. Or they try to contain it by advising people on public health and hope the northern hemisphere summer sees it off.
Punters who bet on sports need sports to be on. The loss of the Premier League would have a significant impact on internet gambling, globally.
No one can predict how this is going to shake out. But this I do know. Governments are persuaded on policy by media reaction. I expect the virus to proliferate throughout the UK because of the density of population contained in a 50-mile corridor between London and Manchester. At the moment the UK Government is trying to contain the virus but at the same time keep the economy going. Pressure will mount, and as Government must be seen to be doing something.
The biggest factor to influence gambling’s fortunes will be how the economy shapes up. The 2008 Great Recession saw both online and offline suffer, as people had less to spend.
Written by Warwick Bartlett