At the end of 2016, it appeared that a huge pattern of growth and record revenues emerged from the likes of gambling and casino industry companies across the UK. With a number of record mergers like Ladbrokes & Coral, and PaddyPower & Betfair, there were huge expectations that revenue would be up by almost 20% across a number of them.
There have also been a number of advances in new casino technology, like Unibet’s parent company Kindred Group seeing annual sales increasing by 54% to £544.1 million – with this push mainly coming from mobile gaming. As of February 24th, the same Group announced a takeover bid of 32Red at around £175m.
While some saw these takeovers as a failing in the gambling industry, it appears that the industry is actually going from strength to strength, and with more people than ever turning to online casinos and mobile gaming, it is highly expected that the industry will continue to boom throughout 2017.
In late 2016, the UK Gambling Commission released updated data, which highlighted that a third of all gambling dollars come from players on the internet. The data showed that online gambling generated £4.5 billion between April 2015 to March 2016, which accumulated to 33% of the entire UK gambling market. Growth in the UK gambling market has been dramatic, and it appears that the US market can’t quite keep up.
The breakdown for gambling in the UK as of February 2017 is:
- Table Games £2.6 billion
- Sports Betting: £1.6 billion
- Slots: £1.8 billion
- Bingo: £153 million
- Betting Exchanges: £152 million
However, there appears to be some problems on the horizon for the gambling industry in the UK. A proposed tax on ‘free bets’ which is scheduled for implementation in August 2017, will lead to a 15% tax on free bets for their customers. This will affect all of the well-known casino operators such as PaddyPower, 888 and more. These free bets are generally one of the biggest and best marketing techniques used by casinos to attract and retain their customers. Fortunately however, this will only affect the slots, as the government reversed their decision to place the tax on all online casino and bingo free plays.
Bricks and mortar casinos in the UK however, aren’t performing quite as well as online casinos, and there are a number of reasons for this. The biggest one that casinos in London in particular believe is holding them back, is outdated legislation from the 1968 Gaming Act. This restricts casinos to a maximum of 20 gaming machines, small casinos to 80 machines and large casinos to 150 machines. While the 2005 Gaming Act was implemented, this did very little to affect the casinos in a positive way. Casinos in London in particular (as attendances in London casinos between 2010-15 made up more than 75% of casino attendances in the UK) believe that this is what’s stopping them from providing a similar customer experience as they would receive in gambling destinations like Macau, Las Vegas and more.
It’ll be interesting to see whether the lobbying of government by casino operators is effective, and while they are right in pushing people towards new technologies online, there are a number of possibilities that UK casinos could open up on land too that could be explored.