Looking back, there are no events that the betting sector has faced of the magnitude of the COVID-19 virus. The only one even vaguely comparable in modern times is the “Big Freeze” of 1978. That started in December and ended a few months later in 1979. Huge amounts of snow were dumped on the UK combined with severe cold. The diesel fuel froze in lorries as temperatures fell to -20C.
The weather played havoc with sporting fixtures. Football matches were abandoned, and when matches did take place the players wore tights to keep warm. Horse racing suffered most, and in those days the horses represented 80% of the betting shop business. Greyhound racing continued, and that enabled the betting shops to stay open. Expenses were lower than they are today, and with some of the staff on short time the bookmakers managed to get through it.
The difference today is that the UK betting sector is already reeling from measures that have severely restricted profitability: compliance, social responsibility, increasing media costs, higher taxes, and FOBT staking limits. We now see many firms unable to build the reserves to see this through, whereas in the past bookmakers always tried to put money aside to cope with whatever the future would throw at them.
But the real difference between now and yesteryear is that with the Big Freeze you knew the Spring would come. No-one knows when COVID-19 will end. Some say the Summer will kill it. Some put faith in a vaccine.
The only mitigation is to push non-sports betting products, virtual sports, number betting and greyhound racing and slots. Will this be politically correct? Probably not. But when you are facing the problems the industry faces now, who cares? You might not be in business in six months.
Will the Government come to the rescue? I will not hold my breath waiting for that one. Government likes that tax it collects but at the same time loathes the industry.
This is not solely a problem for the independent or smaller bookmaker. William Hill has a current market capitalisation of £ 423 million and debt of £ 1 billion.