Online dominates the sector
The UK Gambling Commission (UKGC) has released figures showing the performance of the gambling sector for year ending in September 2018. It reveals that online gambling is still growing and dominates other forms of gambling.
Total revenues in this period were ￡14.5bn. This is a 0.4% drop in comparison with the year ending March 2018. Of this figure, online gambling took a share of almost 39%, with revenues of ￡5.6bn. Online casinos saw ￡3bn revenues, of which about two-thirds came from slots.
Online sports betting was around the ￡2.1bn mark, roughly the same as the previous period. Overall, online betting rose 3.7%. This was largely due to a 21% rise in exchange betting up to ￡342m, and bingo revenues increasing 7.6% up to ￡177m.
Effect of FOBT maximum stake cut
Next in the rankings was retail bookmakers stores, which had revenues of ￡3.2bn. This was a drop of about ￡94m from the last reported period. The main portion of these revenues – 59% – is from gaming machines.
Gaming machines had a small drop of ￡5.6m, a downward trend expected to continue following the recent crackdown on fixed odds betting terminals (FOBTs). The government slashed the maximum stake on FOBTs on April 1, 2019. It was cut from ￡100 to ￡2. This measure was done to help problem gamblers as FOBTs have been shown to be very addictive.
Retail bookmakers will likely see a significant drop in revenues as a result of this move, with some companies saying they will have to close many stores. There are already 500 fewer FOBTs in operation since the last recorded period. In total, there are 33,190 FOBTs in operation, which is the lowest level for the past seven years.
The number of retail stores also declined, falling to 8,423 locations from a previous figure of 8,555. This is a significant decrease from the all-time high of 9,128 in March 2012. Most of the recent closures came from Gala Coral and Ladbrokes, both of which?operate under GVC Holdings.
National Lottery figures were essentially the same, with gross yields of ￡3bn. Physical casino yield dropped 11.4% down to ￡859m. The main reason for this decline was due to an almost 40% drop in baccarat revenues. Physical bingo yield fell 1% down to ￡355m, with virtual betting dropping 4.2% down to ￡81.8m.
What happens next?
The UKGC has cracked down on a number of different fronts lately, after persuading the government to slash stakes for FOBTs. It is now promoting awareness of problem gambling and social responsibility. It has seen an increase in the number of self-excluders of almost 11%.
The number of people opting for elf-exclusion is now over 1.5 million. There was a 28% increase in age verification checks by operators, in comparison with the last recorded period, Age checks are part of a crackdown on underage gambling. Recent figures show worrying trends about young people’s gambling habits.
There are already voluntary advertising restrictions during sports broadcasts, but there have been calls to extend them further. There is pressure on sports teams to end their kit sponsorship deals with gambling companies.
Finally, demands are growing for the introduction of a mandatory levy on gambling operators to help fund addiction programs. The current voluntary set-up is not proving to be very successful, with many operators avoiding paying contributions.