Skip to main content

Member Blog

Mergers and acquisitions activity, what lies ahead?

A positive start to the year

Having worked on some high-quality sales and acquisition mandates for clients throughout the 2019 and achieving a record year, the Corporate Finance team at MHA Larking Gowen were feeling positive going into 2020. The trend continued with a busy start to the year, with new transactions coming into the pipeline and then…Coronavirus struck!

A recent report from Mark-to-Market titled ‘April 2020 valuation barometer’ painted a positive picture in terms of deal volumes and values achieved across the UK mergers and acquisition markets (M&A) for the period 1 January to 31 March 2020 (Q1). Deal volumes in March were in fact up by 15% on March 2019 and were consistent with the trailing 12 month average of circa 300 deals per month. So, no impact from Coronavirus? Unfortunately, this is not the case.

Nearly all completed deals in this timeframe would have been a long way down the track before Coronavirus really hit home and the effective “lockdown” since 23 March. Most of these deals completed in early March before Coronavirus, there was a perfect storm of circumstances that led to an acceleration of deals in the period to early March which has inflated the deal numbers.

So why was that?

There was a flurry of deal activity in the lead up to the Budget announcement on 11 March with lots of speculation around potential restrictions or even the abolishment of Entrepreneurs Relief. We were operating in a marketplace where the single biggest tax relief for business sellers was under threat. Therefore several deals were accelerated to complete prior to 11 March 2020, to make sure Entrepreneurs Relief was “banked” whilst it was still available.

The relief previously applied to a lifetime limit of capital gains of £10,000,000, but post Budget this was slashed to £1,000,000. With potentially significant sums of tax at state it was important for advisors to get deals done for their clients before the Budget announcement. At MHA Larking Gowen we had two transactions complete the week before budget day, with one completing on 10 March. As a result of the changes made the next day, we saved the sellers hundreds of thousands of pounds in Capital Gains Tax.

So what now?

Many transactions that were about to go live or were in the early stages are either now on hold or have been abandoned all together due to the current uncertainty. Speaking with peers across the board it would seem as though Q2 could be slow for transactions being completed. M&A deal sourcing specialists, Dealsuite, recently issued a report titled “Impact of the corona outbreak on the UK Mergers & Acquisitions mid-market”. In the report dealmakers were surveyed about what they felt the impacts of coronavirus would be on deal activity going forward. This painted a bleak picture with four out of five respondents thinking the market would take three-six months to stabilise again and almost two thirds of advisors expecting at least a 25% reduction in activity.

Is it all bad?

Whilst it might seem a bleak picture for M&A activity in the current climate, there will always be exceptions to the rule and deals will still be done. Some businesses involved in staple foods and goods, software and tech, and those involved in medical and care are still performing well and in a lot of cases better, due to the current crisis.

We’ve seen this firsthand with most transactions that are still actively in progress fitting the business sectors above and we completed a deal in the tech sector only last week.

Once we emerge from lockdown it is likely that there will be opportunities for those well positioned businesses to gain market share through acquisition of complementary businesses who perhaps have not managed the down-turn as well. So, we would expect to see some accelerated M&A activity moving into Q3. In addition, business owners will still need to retire, and corporate groups will still need to restructure and buy and sell subsidiaries, so this pent-up demand to sell will release again in due course. However, this crisis is likely to have a downward impact on business valuations and many business owners might be reassessing their aspirations against potentially facing another crisis or down-turn in the future.

What can we be doing now?

Regardless of whether you’re looking to buy or sell a business in the short, medium or long term, there are lots of things that can be done now. James Lay’s recent blog ‘Selling your business amid COVID-19’ highlights some of these and is well worth a read.

There is also some great content available from our business advisory team around surviving the current climate, adapting to the new climate and thriving once markets return which can be found here.

For acquirers, I expect that we will see accelerated M&A processes in the next few months as things start to transition back to normal and government support is withdrawn. Therefore, for successful businesses or serial investors there could be bargains to be had on the acquisition front. If you would like to be made aware of potential acquisition opportunities as they arise, please get in touch.

For potential sellers there is still lots that can be done in this downtime and preparing for the due diligence process would be time well spent. Likewise, if there are key members of staff that need incentivising to help bring the business value back up to what it was pre-COVID-19 then now might be a good time to get an exit focused Enterprise Management Incentive (EMI) scheme in place.

The Corporate Finance team are also highly experienced in advising SME business owners on business planning and exit services and profit improvement programs. If you’d like to explore any of the above in further detail, then please get in touch.

Call 0330 024 0888 or email corporatefinance@larking-gowen.co.uk. You can also find contact details on the Our People section our website.

Jack Minns

Comfortable Home Working Discount for Norfolk Chamber Members

Your new work space may be perfect (the delicious end of the kitchen table, the sunny corner of the living room or away from it all in the quiet loft room) … but your body may be feeling differently! 

We know how important it is to stay mentally and physically healthy right now, and we would like to offer our fellow Norfolk Chamber members a discount on a selection of our ergonimical and innovative chairs. Our team comprises of health professionals with a wealth of expertise and experience, including: – Ergonomists, Physiotherapists, Occupational Therapists and Health and Safety consultants (we know our stuff).

If you are interested then drop us a line, or give us a call and we will whizz over the details! 

Tim Evans, Director  07919 911 774

Company Benefits and Expenses – Areas to Consider: Employee Benefits

Employers have until 6 July to report any taxable benefits and expenses provided to their employees (including company directors) during the 2020 tax year on the forms P11D, and will have to settle any National Insurance arising on these by 19 July.

These forms cover everything from company cars to employee loans and Mat Waters, a Manager in our Halesworth and Lowestoft offices, will be writing a series of articles covering the main areas to be considered when it comes to both providing and reporting benefits and expenses.

The series began by looking at company vehicles and continues by looking at a number of other benefits which can be provided to employees and directors during the year.

Interest-free loans

While interest free loans to employees and directors fall under the heading of employee benefits, if used right they are a cheap, convenient method of personal borrowing if the company has sufficient funds in the bank.

HM Revenue & Customs (HMRC) will only treat an interest-free loan as a benefit if it exceeds £10k to any one employee and, if this amount is exceeded, the taxable benefit is equal to the interest on the loan at their official rate of 2.5%. This makes borrowing an amount of up to £10k a more attractive option than an employee or director going into their overdraft or taking out a personal loan.

However, as is often the case, other taxes need to be taken into consideration.

While taking a £10k loan would not give rise to a taxable benefit, HMRC understandably don’t want company directors taking what would be a tax-free £10k out of a company as a loan rather than either salary or dividends. Should a loan be taken out by a ‘participator’ (a person, or spouse of a person, who has a shareholding or in the company) then the loan is required to be repaid within 9 months of the end of the corporation tax period in which it is taken. This means that for a company with a year end of 31 March 2021 could provide a loan of £10,000 on 1 April 2020 which – provided it is repaid by 31 December 2021 (21 months later) – would not give rise to any tax charge on either the director or company.

Should the loan above not be repaid by this date, the company would be liable to tax at a rate of 32.5% on the outstanding amount of the loan at 31 December 2021 regardless of it was under £10k.

With being just one day late making the difference between having a 21 month interest-free loan or a tax charge of £3,250, it is important that the loan rules are understood and so be sure to seek advice from your usual contact if you are wanting to withdraw money from your company in excess of your salary and dividend package.

Private health and critical illness insurance

When considering if an insurance policy should be treated as a taxable benefit or not, it is important to determine who the beneficiary of such a policy would be.

For most “Key Man” policies, these are the company insuring themselves against the loss of income and additional costs resulting from the disruption caused by losing a key member of staff due to illness or injury. So long as the policy is drafted so that the company is the beneficiary then no benefit arises on the individuals) covered. In essence, the company is insuring its employees like it would any other assets.

For policies where an employee or their family will be the beneficiaries of the insurance pay out then the employee in question will be in receipt of a benefit equal to the annual insurance premium.

When a financial services organisation proposes any policy relating to healthcare, critical illness or death in service it is important to establish not only the tax treatment but also the employment benefit position. The policy where the beneficiary is a single director could be sold on the basis that the premiums are allowable against corporation tax, but this is dependent on it being treated as a taxable benefit which, without knowing their personal tax treatment, might end up incurring more tax personally than it saves in the company. 

In circumstances where the cost of the premium is allowable for corporation tax, it is important to remember that the employer is required to pay Class 1A National Insurance of 13.8% on any benefit reported on forms P11D so the overall saving will be nearer 11% rather than at the 19% rate of corporation tax. 

Accommodation

As part of an employment, rent-free or subsidised accommodation could be provided which is either owned or leased by the employer.

This is one of the more complex areas of employee benefits where, depending on the circumstances, this could be exempt from being assessed as a benefit or involve a calculation requiring the property’s cost, the 1973 gross rating value as assessed by the local authority or the value at the time the employee moved in.

The provision of accommodation will be exempt from being treated as an employee benefit if it can be demonstrated that the employee can’t perform their work duties properly without it. One example of this would be if a farm cottage was provided to an agricultural worker who was required to be on hand throughout the day to tend to livestock. There are also certain industries where it is usually expected for accommodation to be provided, such as a pub manager living upstairs, which can also be treated as exempt.

When determining if an exemption applies, it is important to distinguish between employees and directors as the latter would need to demonstrate they are a full-time employee and hold less than 5% of the shares in the company.

Where an exemption won’t apply, it is important to discuss the situation with your usual tax advisor so that the history of the property and its use in the company can be reviewed and the correct benefit calculation carried out.

Your usual tax adviser will also be able to consider any other property tax implications as over the past few years HMRC have introduced new tax charges on properties held within companies.

Should the company own or lease any residential property with a market value of £500,000 at 1 April 2017 then this will fall within HMRC’s Annual Tax on Enveloped Dwellings (ATED) regime and could be required to pay an annual charge starting from £3,700 if it cannot be demonstrated that the property is used within the business e.g. let out to a third party on a commercial basis, being developed for resale or occupied by a farm worker as in the example above. 

Other assets provided for personal use

A company may also provide other assets to its employees for their personal use other than cars, vans, or property. One example of this would be if an employer provides IT and entertainment equipment to an employee for their personal use, while retaining ownership.

The employee will receive a taxable benefit based on 20% of the market value when the asset was first provided to them, plus any annual running costs relating to the equipment. If the employer rents the asset, then the annual rental charges should be substituted for the 20% of market value if these are a higher figure.

Where there is a business element of usage required as part of providing the asset, such as a takeaway delivery driver being provided with a moped, then the benefit can be reduced by the proportion of business use.

What can be paid to an employee without a benefit arising?

In the third and final instalment of the series I will be looking at what can be paid to employees without needing to be reported and how to ensure what employers consider to be business expenses don’t end up being assessed as a taxable benefit on their employees.

For more information, get in touch

Maintaining Business Post COVID-19

Whilst it is undoubtedly true that for most businesses the outbreak of COVID-19 or coronavirus has been extremely damaging, for some SME’s the effects have been positive. Who cannot think of the small butchers, bakers and garden centres, usually competing with larger competition, who are now busier than ever. I hear, in meetings, the cries of “long may it continue” and “finally the value of the SME is coming through.” Whilst of course, it is great news, SME’s should take this time to review their business model. After all, an upturn of sales is great, but maintaining business post COVID-19 is the aim. As its effects, we know, will not be felt forever.

 Qualifiers and Differentiators What is a business qualifier?

A business qualifier is an offering that your consumer expects to receive before doing business with a certain company. This can be, for example as simple as the ability to take a card payment, or a set accreditation, or service offering.

What is a business differentiator?

A differentiator is one of the elements of your business that sets you apart from your competition. A differentiator for a company such as Google is their user base, algorithm and speed of search.

Maintaining Business By Knowing Both

Right now, customers’ normal buying decisions may well be somewhat skewed. So it is important to understand their usual buying profile and what they see as a qualifier and a differentiator. Think about your business offering and what customers must have, and what sets you apart. An easy one to relate to is a butchers, compare what customers must have, to what sets them apart. Below are some examples of each based on an average customer for this example.

Example Business Qualifiers

Reviewing that example of the butcher, examples of a qualifier would be:

  • Flexible payment options, the ability to pay with cash or card.
  • Good quality cuts.
  • Array of choice.
  • Within a certain distance from home.
  • Opening hours that suit.

Example Business Differentiators

Things that may differentiate a butcher from most of its competition, namely supermarkets are:

  • The ability to get to know your butcher, so gaining feedback and cooking suggestions.
  • Provenance of the food, knowing where it has come from.
  • The extreme quality of the meat compared to others.
  • The much wider choice available, including different meat types.
  • Ordering exactly how much you want, so less waste.

This is of course a non-exhaustive list, but outlines the point.

Qualifiers As A Given

Quite simply, make sure you offer things that make people even consider buying from you. Right now, customers may well be okay with paying cash to small businesses as the wait for entry to the premises isn’t so long. Or that you are offering delivery, but a caveat is they must pay cash. Right now, it is an inconvenience, but the situation outweighs that. In future, it will hamper the buying decision, making the business unviable in the future.In 2010, six out of 10 transactions were in cash, but that has long been overtaken by debit cards. Are certain business practices making it harder for customers to do business with you? If so, change them.

Leverage Differentiators

It is so important to get your message across, to make customers remember just why it is that they bought from you to begin with. Or what extra value they got from buying from your business. Remember to get that message through whilst sales are up to reinforce the opportunity for potential sales in the future.

Keep In Touch With Customers

A local butcher sending out a fortnightly email may sound to those that do not do it, odd. My response is short and sweet. Why wouldn’t you? Adhering to GDPR regulation (and this post isn’t about that) think about getting customer emails and keeping in touch. Start such marketing before the lockdown ends, and keep it going into the future. If you can make your customers purchasing habitual now, it will continue too. Email marketing is just one way to reinforce this habitual purchasing.

This post was adapted from the original blog – Maintaining Business Post COVID-19

Bounce back loans

Tuesday, 28 April 2020

On Monday 27 April the Chancellor unveiled a new scheme aimed at providing more assistance to small businesses. This is thought to be in response to calls from business representatives for more to be done to help small businesses who need an immediate cash injection to keep operating.

The ‘Bounce Back Loans’ will allow small businesses to borrow between £2,000 and £50,000 via the fast-track finance scheme. The cash will be available within days, and in some cases 24 hours.  The Government will provide lenders with a 100% guarantee for the loan. 

The application process has been designed to be more straightforward than the existing Coronavirus Business Loan Interruption Scheme, with no forward-looking business viability tests or eligibility criteria for the finance.

In response to the announcement, the British Chambers of Commerce Director General, Adam Marshall, said:

‘The Chancellor has demonstrated he is listening to the concerns of our business communities and taking steps to get cash to the front line where it is needed’.

He continued:

‘This new route for our smallest companies to apply quickly and get a fast decision will be crucial to those who have struggled to get a CBILS loan’.

As the loan was only announced yesterday, full details of how it will operate will follow. Current details of the scheme are as follows:

  • businesses will be able to borrow between £2,000 and £50,000.
  • loans will be interest free for the first 12 months, with a low standardised interest charge for the remaining period of the loan.
  • no repayments will be due for the first 12 months.
  • the scheme will launch for applications on Monday 4 May.
  • businesses can apply online through a short and simple form.
  • successful applications will be paid out within days.
  • loans will be 100% guaranteed by the government.

The loans will require repayment and the cashflow impact of future repayments will need to be considered when applying for the scheme.

If you have any questions, please get in touch with your usual contact at MHA Larking Gowen, or email enquiry@larking-gowen.co.uk

You can find contact details on the Our People section of the MHA Larking Gowen website.

James Caley

New business support tool available on GOV.UK

Friday, 24 April 2020

Whilst the Government has communicated the support available for businesses and the self-employed, for many, navigating the numerous assistance packages available can be a confusing and stressful experience.

We’re here to help as much as we can and I hope you are finding our enquiry@larking-gowen.co.uk and we will be more than happy to help.

Tessa Brown 

TaxAssist’s debut Virtual Discovery Day a great success

Hosting event digitally proves popular with potential franchisees.

During the COVID-19 pandemic, TaxAssist Accountants is holding Virtual Discovery Days on Zoom, where potential franchisees can find out more about the business model, technical and business development support on offer, as well as business planning and finance raising, from the comfort of their own home.

Six delegates joined the first Virtual Discovery Day held on the 21st April and praised the format of the day.

“The day was excellent, informative, useful and seamless. The chat function worked particularly well and I was most impressed with the business plan as it highlighted the value of the investment required,” said one delegate.

“TaxAssist ran a very professional and informative virtual Discovery Day in April 2020, which provided me with a good starting point for assessing the franchise opportunity. The virtual format gave all participants the chance to address queries either during or between sessions,” enthused another.

David Paulson, Senior Manager, Global Franchise Recruitment at TaxAssist, said: “Ten members of staff logged into the meeting at various points during the day. It ran without a hitch, which bodes well for two further Virtual Discovery Days we have planned for Saturday 16th May and Tuesday 16th June.

“We’ve had very positive feedback from the delegates who joined us and we have now following up with them individually with telephone one-to-ones. I’d encourage anyone interested in finding out more about our future events to give me a call on 0800 0188297 or visit our website for more information.”

Although all TaxAssist Support Centre staff are working from home, they are fully operational, and therefore TaxAssist Accountants is still able to welcome new joiners to the franchise. The June course will still be going ahead online, with two further courses planned for later in the year. TaxAssist Accountants is a full member of the British Franchise Association and is ranked 21st in the Accountancy Age Top 50 rankings. It has also won ‘5 Star Franchisee Satisfaction’ for seven years running from independent research agency WorkBuzz and the Support Centre has recently been awarded with ‘5 Star Employer’ status for the second year in a row based on feedback from its 60 strong work force. To request attendance on a virtual Discovery Day, please forward your CV and a completed application form to franchiseenquiries@taxassist.co.uk  

Gaming is Big News in the Norfolk Business World

Gaming has risen in popularity, so much so that it has taken centre stage in the life of many people. Games like  Fortnite, Pokemon and Call of Duty earn significant amounts of revenue for developers and publishers.

The variety of gaming content available is vast with multiplier games at the forefront of the industry. Casino gaming is also rising in popularity with sites like Betboss.com providing information about the best providers in the sector.

UK companies securing their part of the action

The UK gaming industry accounted for half of the total entertainment revenue in the country in 2018. This meant that the money earned in the industry was greater than that for the music and video industry combined. In fact, the UK video game sector is the largest in Europe having contributed more than $1.96 billion to British GDP in 2017. Gaming companies in Norfolk are taking advantage of this growth in the UK gaming industry.

Gaming developer community growing in Norfolk

The gaming industry in Norfolk is an inclusive one. It is growing not just because of the sales it attracts but because of the community that has been created.

The Norfolk Game Developers group is a big part of this. The group has members from different backgrounds and they have various levels of development experience. With this in mind, the group does not just include professional developers, although those who do want to make money from a thriving industry are helped in doing so by the opportunity to build networks with other members of the group. Aside from this obvious advantage that the group creates, it also helps to create support for gaming, and related businesses, within Norfolk, together with other initiatives.

A welcoming gaming environment

The Norwich Games Festival is an event which is supported by the Norfolk Game Developers Group. It helps to create a friendly gaming environment in the area and also helps to promote gaming overall. The event is self-financing and aims to attract various groups in the local gaming community including:

  • Gaming fans.
  • People new to the gaming world.
  • Families.
  • Students of gaming related subjects.
  • Game developers.
  • Gaming startups and freelancers.

Events like this help to increase awareness of local gaming related businesses such as One Life Left which is a video gaming cafe in Norwich. Gaming enthusiasts can call into the cafe to enjoy playing their favourite games and have a snack and a drink at the same time. The cafe was opened by Jon Gage who had worked as a manager at Game and saw the opportunities that the growth in the gaming industry was creating in Norfolk.

It’s clear that the gaming industry is having a big influence on business in Norfolk. Whether it’s independent developers networking in the Norfolk Game Developers group or businesses like One Life Left opening up, there are many opportunities to be explored. Given the continuing growth of the gaming industry in the UK it seems like this is a situation which will continue into the future.

Coronavirus Signage Solutions

During this unprecedented time, whether your business is temporarily closed, has had a change in services or are looking for Coronavirus related signage, Signs Express is here to help. We’ve worked with the NHS for over 30-years as an approved supplier, and with over 65 centres throughout the UK and Ireland, are here to assist with any emergency or temporary signage you may need.

Encouraging social distancing in businesses that remain operational is of the utmost importance, with personalised floor graphics such as 2-metre-long arrows, footprints and other graphics being a great, cost-effective solution. All the while looking professional, incorporating your brand and, most importantly, supporting the wellbeing of your customers.

From NHS approved messaging to bespoke artwork, we can supply a range of solutions including banners, labels & stickers, vehicle graphics, notices, branded crowd barriers, digital signs and Health & Safety signage available for installation or supply only.

Please stay safe and take great care of yourselves and your loved ones. We are in this together and we will get through this together.

Coronavirus and Family Law: Can the Children of Separated Parents Move Between Households?

The current Government ‘Stay at Home Rules’ state that children under 18, who do not live in the same household as their parents, or one of their parents, can move between households for the purposes of continuing existing arrangements. This provides an exception to the mandatory stay at home requirements.

However, whether a child or children should continue to move between households will be a decision for the parents to make after carefully considering various issues such as the health of the child or children, the risk of infection and the presence of any recognised vulnerable individuals in either household. Parents will also have to balance these considerations against the potential harm to the child or children if existing arrangements are stopped or varied.

Richard Dilks, Head of Family Law at Hatch Brenner comments: “By far the best way to consider these issues is for the parents to communicate with one another constructively whilst keeping the question of what is in the best interest of the child or children at the forefront of their minds. If parents find it difficult to communicate then they could seek the help of a Family Mediator or a specialist Family Law Solicitor. If it is agreed that existing arrangements should be varied, then it would be a good idea for the changes to be recorded by both parents.”

Guidance from the Family Court has made it clear that where one parent exercises their parental responsibility to vary an existing arrangement without the agreement of the other parent then if this is subsequently questioned by the other parent in the Family Court, the Court is likely to look to see whether each parent acted reasonably and sensibly. Parents should not use the current health crisis as a reason to frustrate existing arrangements for children to spend time with their other parent.

If a decision is made by one parent or both parents to vary existing arrangements then parents should look at other ways in which children can keep in contact with the other parent remotely by using Skype, Facetime and Zoom, for example, or through messaging services and the telephone.

If you have a family law query about children disputes at this time, please contact Richard Dilks, Norwich Family Law Solicitor via 01603 660 811 or at richarddilks@hatchbrenner.co.uk

Flying on Google with Piiq Risk Partners

We are delighted to have been approached by Piiq Risk Partners to help carry out SEO (Search Engine Optimisation). Specifically, to help rank the new site for their brand name ‘Piiq Risk Partners’ which is essential with any site launch and also keywords relating to aviation insurance and risk management solutions.

Our Approach

With the site built in Craft CMS, we spent a day understanding the structure and build of the website. Although a lot of the site is designed using hashbangs, where you click on a link and it renders lower down the page, rather than opening a new page – there are still around 6 pages which is sufficent to rank well on Google. Ideally, we would prefer the website to have 20 or 30 individual pages rather than using one, but initially this should not be a problem.

We have used our regular SEO tools of SEMrush and Screaming Frog to identify any quick wins from a technical perspective, including:

  • Meta-data optimisation
  • Image optimisation
  • Heading optimisation
  • Sitemap optimisation

And we presented a list of changes to the client to provide their feedback.

Phase 1

In Phase 1 of the website, we intend to make all the suggested changes live and we should see an immediate impact or secure rankings for their brand name within the first 6 weeks of the campaign.

In addition to site fixes, we have encouraged the client to add more content to the website, to especially beef it up a bit for Google’s eyes and also generated some natural links to point to the site from partners and PR. The links should effectively strengthen the domain, which will be vital to secure stronger rankings.

Phase 2

In Phase 2 of the site, we look forward to building a full SEO campaign. This will begin by compiling a long list of keywords that are relevant to Piiq Risk Partner’s proposition – surrounding aviation insurance and risk management solutions. Our keyword list will combine both short-term keywords (e.g aviation insurance) and long-tail keywords (insurance for jet engines and insurance for aeroplane engines) – to cover a full range of search.

To maximise our rankings for these keywords, we will create a series of landing pages to target each key phrase and continue to acquire links through aeroplane/aviation specific websites and mainstream press. We will maintain our technical audit of the website by carrying out regular checks using our SEO tools – and this will enable us to secure the best rankings possible within the next 3 to 6 months.

How Has Coronavirus Changed the Sports Betting Industry?

As coronavirus cases hit 3 million, and surpass over 200,000 deaths, countries from all over the world have begun to impose lockdown and social distancing measures, attempting to slow the spread of the virus, and save lives in the process. Whilst necessary, these restrictions have had a drastic impact on numerous different industries, including sports and sports betting – with such major events as the Tokyo 2020 Olympic Games and the UEFA Champions League finals postponed in response to COVID-19. With so many major sporting events for this year now postponed, the sports betting industry is taking a significant blow, potential bets throughout all types of sports now drying up. As with most industries through this period of uncertainty, betting, and gambling as a whole, have had to adapt to the current situation in order to stay afloat whilst we wait out the pandemic. Two of the major ways the industry is coping with this blow include the rise in virtual sports and online casinos, with many online searches, including the likes of ‘new online casino‘ increasing as more people take to the internet to play.

Virtual Sports

Whilst many physical sporting events have been either cancelled or postponed due to COVID-19, many sites still offer a variety of different virtual sports for users to bet on, including:

  • Football
  • Horse racing
  • Greyhounds
  • Track cycling
  • Motor racing

With virtual sports, users can choose from a selection of fixed odds games, with outcomes decided using a random number generator (RNG). All users participating will have the same outcomes from the virtual game/event. Bets are set up by the bookmaker, with outcomes always being decided via an algorithm so that the winner is chosen without bias.

One of the main differences between physical and virtual sports betting, besides the setting, is that virtual events can occur numerous different times throughout the day, offering users more games to choose from.

Whilst virtual sports aren’t quite the same experience as real-life events, with so many cancellations and postponements, these e-games provide an effective way to fill the gap whilst the sporting world waits for COVID-19 to end.

Online Casinos

As betting on sports is a form of gambling, many of the sites offering this will also offer other types of games, including slots, poker, roulette, blackjack and more. This means that whilst sports betting may be a relatively dry area for the industry at present, operators still have users coming to their sites to play online casino games.

In the same way that virtual sports replicates real-life sporting events, online casinos are a type of virtual casino simulating bricks-and-mortar casino houses. Aside from the obvious different of being a virtual space, online casinos also differ from regular casinos in many other ways: offering bonuses (e.g. free spins and no deposit) and varying payment methods. As is the case for many industries at present, COVID-19 has had a considerable impact on gambling operations. However, with the rise of the online world and all the technological advancements its brought, the gambling sector, much like other businesses, is adapting to survive the temporary shut-down to many of its physical attributes.