Eight months into the pandemic, we are facing the sobering reality of a long-lasting impact on many industries, including the gambling industry. “The entertainment industry is no stranger to what the rest of the productive sector in our country suffers from,” a former employee of Caliente group, the Mexican casino operator, told us. In fact, they are bit of a gamble when it comes to available cash flow.
Casinos have suffered a perfect storm in the form of low liquidity, lost funds due to lockdowns, and exclusion from benefit packages like Peru’s “Reactiva Perú.” There is also much uncertainty surrounding whether consumers (and employees) will return to their pre-lockdown habits readily.
“Casinos will be at 50-60% capacity when they reopen, we don’t know if people will come back.”
Senior manager at a well-known chain of casinos in Mexico.
Ironically, the current economic climate has created the perfect time to buy casinos in Latin America. According to a specialised gambling lawyer we spoke with, “If I were an investment fund with a wide pocket, I would dedicate myself to buy all the casinos I can, as now they are at a ‘COVID price’ literally, it is the best time to buy physical casinos. In my opinion, I would start by buying from all the small operators and then increase my market share.” Buying casinos is no longer about physical facilities alone.
“Young people won’t play in casinos but will engage on-line, e-sports is growing like crazy.”
A gambling lawyer in Peru.
This sector has begun to evolve online as well. An example of competitors snatching up opportunities is the Chilean site Solbert owned by the Chilean group, Dreams. A gambling lawyer explained, “I have several clients in Latin America and in Peru as well and the older ones are starting to interact through the internet.” As a result, regulations are emerging, “Colombia was the first one, and Panama already has online legislation starting in March 2020” a gambling entrepreneur told us, adding, “Another segment that is developing is e-sports, it’s crazy, right now there [are] 15 million people connected to e-sports and online casinos now have e-sports betting.”
Entrepreneurs have seen the writing on the wall and have pivoted to meet the “new normal.” Place your bets on the winners!!