You are here
Africa’s gaming market and the post Covid-19 era
While Africa has avoided as devastating an impact from novel coronavirus (Covid-19) as Europe, North America and Asia, its effects have severely disrupted the continent’s gambling industry. This could provide an opportunity to expand and diversify the industry, writes Yahaya Maikori.
The coronavirus (Covid-19) pandemic is one economic disrupter that was not envisaged by any economists. Before this pandemic, several disease outbreaks such as Sars, Ebola, chicken flu and meningitis have threatened our very human existence. Typically the predictions during every round of the epidemic have been catastrophic for Africa for reasons which range from poverty or poor healthcare to weak infrastructure.
Fortunately, since the 1918 Spanish flu which wreaked global havoc, humanity, armed with science, has been able to contain, and in some cases extinguish, some of these diseases with speed and precision. But this pandemic, unlike previous outbreaks, has brought the global economy to its knees affecting almost every aspect of human and economic activity.
So how has Africa faired during this pandemic? Surprisingly most of sub-Saharan Africa seemed readier to combat the pandemic than most of Europe and North America. Some argue this is connected to Africa’s experience of dealing with similar outbreaks, while others attribute low infection rates to the tropical climate.
Regardless of what the reasons may be, most African countries have decisively put their populace under lockdown. Some have even imposed curfews, which have effectively led to the shut-down of almost every commercial activity.
How have these actions affected the gambling industry in Africa? And what will the industry look like post Covid-19?
Well, gambling was one of the first industries to feel the immediate impact of the pandemic through the indefinite suspension or outright cancellation of sporting events including the much-anticipated Olympics. The global suspension or cancellation of most sporting events has left punters without live games to bet on, aside from re-runs of filmed matches. The knock-on effect is that sports betting, which accounts for most of the industry’s revenue, has crashed to almost nil.
While virtual games are a favourite in certain markets, it is still not a substitute for live games. It is at best a supplementary game. Also, other forms of gaming are not immune - casinos have been forced to shut their doors to customers, while online gaming even in the best of times seldom accounts for more than 30% of the players.
After two to three weeks of the shutdown, with a possible extension looming, many people have lost their livelihood and they are currently in survival mode. The industry itself, aside from the very few properly capitalised companies, cannot sustain more than a month’s wages if the lockdown continues beyond this period.
With the industry effectively comatose, how would the interplay of these dynamics play out in the post Covid-19 era? First, one should bear in mind that there may be several waves of infection, leading to several rounds of global economic shutdown until a vaccine is discovered.
I foresee a rash of regulatory, policy and legislative activity across the continent to amend online gaming laws, in a bid to block leakages associated with online gambling. South Africa will probably be at the forefront of legitimising online gambling, especially as the casinos - which are significant contributors to the economy - will lose revenue to countries such as Lesotho and Mauritius.
The current situation will likely lead us to two drastic behavioural shifts. First there will be the loss of players as a result of them taking time away from gambling, and even stopping permanently. On the flip side, there will be an influx of economic refugees who need to rely on gambling for income. Depending on how things develop, the net result of these patterns remains to be seen.
For operators which have been locked out of the booming business, this may be the perfect opportunity to introduce and promote games such as poker, esports, online casino, bingo and slots to a market which was fixated with football, and the social experience of retail betting.
Mobile games providers and other non-retail technologies can take advantage of the social distancing policy which has curtailed movement, to catch the attention of the retail market as well as engage its customers in a new channel.
In the last four weeks Europe and North America have witnessed a spike in online gaming - it’s not a stretch to see this pattern replicated in Africa. However, such growth may be slower considering affordability issues related to broadband and smart gadgets.
These concerns notwithstanding, this pandemic may be the tipping point for online gambling in Africa.
The silver lining in all of this is that our industry is not alone in this crisis. It’s a global situation that affects everyone and every industry in one way or the other. The world is entering uncharted territory of which gambling is but a very small cog in the wheel.
Yahaya Maikori is the senior partner of Law Allianz, a leading African gaming and entertainment law firm. He also co- founded Global Gaming Group, a business that has advised regulators, companies, and startups across key markets in Africa’s growing gaming industry.