The economy in 2021: the boom is coming

Gbgc Hospitality Economy Boom Gambling Demand

While a full recovery from the economic impact of the coronavirus pandemic will take time, Warwick Bartlett, director of Global Betting and Gaming Consultants, suggests there is significant pent-up demand for gambling, with casino resorts likely to be among the key beneficiaries as holiday-starved tourists begin travelling again.

 

Getting back to normal is going to take longer than people think. The vaccination of the peoples of Europe and North America is going to take time. The Isle of Man, where GBGC is based, has already cancelled its summer festival of motor bike racing, the TT, for a second year in a row. The authorities clearly think there will be risks for it to go ahead, even though they have acquired enough vaccines to serve the entire population.

Warwick BartlettThe best shot for a bounce back in the economy, if all goes according to plan – which these days is no guarantee – would be improvements from April.

A friend of mine working for one of the UK’s big banks tells me they are stuffed out with money. Not surprising when the UK Government has forbidden them from paying dividends and their customers have not been out spending on cars, holidays and eating in restaurants. Savings are up £113bn from January 2020 to October 2020.

Goldman Sachs has said that the bounce back in the US, now a major internet gambling market will be significant and point to 5.9 percent economic growth. Consumers and business have accumulated $3.5tn. Some forecasters are saying we are going back to the roaring 1920s. The last big influenza type pandemic was 1918 and lasted two years. So, you get the significance of comparing now with then.

Where will this money go? Primarily on what has been denied, holidays, restaurants, and some will go on gambling which represents just under one percent of the global economy. As the economy grows so will the growth of gambling services. Las Vegas will be a big beneficiary, and so will racetracks, sports betting will grow as the stadiums fill with fans, and casinos either those that service locals but especially resort properties that combine gambling with holidays.

Everyone will suddenly want everything, and this will create bottlenecks in supply, leading to higher prices and bigger margins of profit. The stock market is forward looking, the Dow and S&P500 are at highs. Valuations are justified if all goes to plan, otherwise it’s going to be a major correction.

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