Tighter regulation, higher taxes, and a constant flow of negative media coverage caused the UK’s gambling market to decline for the first time on record in 2019. As the UK prepares to leave the European Union in three months’ time, the world’s largest regulated gambling market no longer has the appeal it once did and operators are looking abroad to generate new revenues.
According to recent Gambling Commission figures, in the year to March 2019 revenues in the UK gambling market fell from £5.6bn to £5.3bn. And after UK authorities moved to ban gambling firms from accepting credit card payments from April this year and brought in new stringent rules on age verification in May, the market does not look any easier this year. In fact, restricting gambling has become a rare cross-party issue in Westminster in a period of otherwise increased polarisation.
The tougher climate has affected gambling businesses of all sizes in recent years, with Royal Panda, Aston Casino, and MaxEnt all pulling out of the UK market this year and William Hill, one of the UK’s most well-established bookmakers, has failed to secure any major deals since it turned down a £3bn merger with Rank Group and 888 Holdings in 2016.
Nonetheless, 2020 has provided a surprise bonus for online gambling operators, with the coronavirus crisis, which saw gamblers spending more at online casinos and bookmakers. According to the Gambling Commission, data provided by UK operators such as 888 Casino, Betway Casino, and others a Gross Gambling Yield (GGY) increase of 115% for online real event betting between May and June (rising to £217.5m), with GGY higher during June than at ‘average’ pre-lockdown levels.
As the crisis took hold, UK authorities acted to protect players, warning operators to look out for online sessions lasting over 60 minutes, and to closely monitor players that had changed their pattern of play, which dampened potential growth. And as the UK eased lockdown restrictions and started to bring the furlough and other financial protection schemes to a close, it appears gambling levels have begun reverting towards the mean.
The brief period of growth this year has given UK online gambling operators some respite, but the trend is towards lower UK revenues and many firms have begun to look abroad for growth. Bet365 has turned its focus on unregulated territories in Asia, whilst Ladbrokes Coral owner GVC is expanding in Brazil. The global nature of the internet also provides online operators international audiences with offers of free spins at Jackpot City NZ or free bonuses upon signup designed to attract players in from a variety of countries. Meanwhile, in the wake of the 2018 Supreme Court decision to legalise sports betting, the US has become the hottest market, with both William Hill and GVC inking multi-year deals in cooperation with sports broadcasters.