The world’s top 25 most valuable gambling brands could lose a combined total of US$6 billion worth of brand value as a result of the COVID-19 pandemic, according to Brand Finance’s first-ever brand valuation of the gambling industry. Brand Finance is the world’s leading independent brand valuation and strategy consultancy and has introduced a gambling industry ranking for the first time this year.
Brand Finance’s analysis shows that the gambling sector is one of the most heavily impacted industries globally and could face brand value loss of up to 20%. That impact will be on both live casinos (where patrons may be reluctant to return to crowded indoor spaces) and online sports betting (where the dearth of professional sports has reduced betting opportunities). There is, however, some potential upside for online casino and poker games as a result of more people seeking entertainment at home, and Brand Finance estimates that potential brand value losses in this segment should not exceed 10%.
Looking beyond the gambling sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.
Declan Ahern, Valuation Director at Brand Finance, commented:
“The global coronavirus pandemic is disrupting the global gambling sector, with large swathes of the industry completely shut down as nations imposed restrictive lockdowns. At the same time, people restricted to their homes are seeking more online entertainment, leading to a surge in online casino and online poker play.”
Wynn is world’s most valuable gambling brand
Wynn Resorts is the world’s most valuable gambling brand, with a valuation of $3.8 billion. Wynn Resorts operates a more consistent branding across its properties, whereas competing properties offer segmented brands which are unique to each property.
The top ten gambling brands were dominated by consumer facing casinos, accounting for seven of the ten most valuable gambling brands.
Declan Ahern, Valuation Director at Brand Finance, commented:
“Wynn is the world’s most valuable brand in gambling and casinos because of its iconic stature as operators of high-end hotels and casinos. The consistent brand management across the Wynn properties gives it significant brand strength and a reputation for service excellence globally.”
Genting is second most valuable brand after suffering large falls in brand value
Genting (brand value down 24% to $3.5 billion) and Galaxy Macau (down 40% to $2.9 billion) were the second and third most valuable gambling brands this year. Both brands have suffered significant falls in brand value, associated with big drops in forecast revenue.
International Game Technology is world’s most valuable business-to-business gambling brand at $1.9 billion
While the biggest gambling brands were consumer-facing casinos, International Game Technology (brand value up 17% to $1.9 billion) is the world’s most valuable business-facing gambling brand. International Game Technology supplies various products to the gambling industry and achieved a brand value just ahead of competitor Scientific Games (up 19% to $1.6 billion).
Bet365 is world’s most valuable online gambling brand at $1.6 billion
Bet365 (brand value up 21% to $1.6 billion), was the most valuable gambling brand in the online sector. The privately owned firm is valued well ahead of competitors Paddy Power (brand value up 15% to $699 million), BetFair (up 1% to $668 million) and PokerStars (down 40% to $633 million), which are all owned by publicly traded Flutter Entertainment.
Coronavirus has caused significant problems for bet365, as the lack of professional sport has severely restricted the available betting markets. This may cause significant challenges for the sports betting brand until the full range of sports returns, but during the crisis, bet365 has strengthened its brand as a caring employer with guarantees that no employees will be laid off until at least the end of August at both bet365 and Stoke City Football Club, which is chaired by bet365 co-founder Peter Coates. Bet365 chief executive Denise Coates has also earned significant media coverage for her own charitable donations of £10 million to the local Stoke NHS trust.
Despite a big fall in forecast revenue, Galaxy Macau remains the strongest gambling brand
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. According to these criteria, Galaxy Macau remains the strongest gambling brand with a AA+ rating. This is despite a fall from AAA rating this year as customer favourability towards Galaxy Macau dropped.
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 25 most valuable gambling brands are included in the Brand Finance Gambling 25 2020 ranking.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand Strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Gambling 25 2020 ranking.
Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.
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About Brand Finance
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Brand revenues are discounted post-tax to a net present value which equals the brand value.