UK gambling industry contracts for the first time in history

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UK gambling industry contracts for the first time in history
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Recent reports from the UKGC show a 0.3% decrease in gambling revenue (GGY) in the UK. For the first time, the industry has reported a year-on-year decline, and annual statistics show that all sectors of the UK gambling business have been affected.

Mixed results in the online gambling sector

For the first time ever, the British gambling industry is reporting a year-on-year decrease in revenue.

According to the UKGC, the yield was £14.36bn for the year ending in March 2019. And although online slots are showing positive trends, the overall statistics also show that all aspects of the gambling industry have been affected negatively.

For instance, online gambling has decreased by 0.6 %, despite the 6% increase in online slots. And since online gambling makes up for 37.1% of the British gambling industry, these numbers are, of course, significant. Just like the overall British gambling market, this is the first time ever, the online gambling industry reports a decline in revenue.

An unusual number of draws in the British Premier League

If you ask the online bookies, some peculiar statistics have contributed to this year’s unsatisfying reports. For instance, there’s been an unusually high number of draws in the Premier League season, which has worked against the bookies.

Online slots are on the rise

According to the UKGC, the primary source of revenue within the online gambling sector was generated by online casino games. The report shows a 6% increase in online slots, amounting to an annual yield of £2.12bn. Furthermore, online roulette has grown a lot, generating revenue of £448.2bn.

Massive drops in bets on horse racing

When it comes to online sports betting, the numbers are somewhat contradictory. And despite there being a 2.7% increase in total stakes, the overall yield dropped by 10%. The UKGC reports show that football is still the most popular sport, followed by horse racing in second place.

The past year, online betting sites generated £991.2m from bets on football and £552.1m from bets on horse racing. Horse racing has seen a year-on-year decline of 15%.

Restrictions of FOTBs have had a severe impact on the industry

UKGC’s annual report has several interesting facts and offers some plausible reasons for the industry’s first-ever contraction.

For starters, the UK’s retail betting shops are facing difficult times ever since restrictions were placed on fixed-odds betting terminals (FOTBs) in April 2019.

The FOTBs were popular in the country, as they gave punters a quick way to place their bets. However, experts have described FOTBs as the “crack cocaine of the gambling industry”, while studies have shown them to be highly addictive.

Therefore, the UK government decided to cut the maximum stake on FOTB machines from £100 to £2. The government announced the decision in May 2018, but the restrictions weren’t implemented until April 2019.

Thousands of betting retail shops are forced to close

This decision was a massive blow for the retail betting shops, who saw a 60% decline in revenue overnight. Since the restrictions on FOTBs were implemented in April, more than a 1,000 betting shops have been forced to shut their doors – that’s an average of four shops per day. According to estimates, this is just the tip of the iceberg, as another 2,000 shops are expected to close within two years.

11,000 people risk losing their job

Since retail betting shops make up for 49% of the gambling industry’s workforce, it’s not surprising to see a 3.2% year-on-year decrease in employment as well. The British gambling industry currently employs 102,782 people, and only 10% of the employees work within the online gambling sector.

Should British betting shops continue to close at this rate, a lot of people will obviously lose their jobs. If the forecast proves to be correct, approximately 11,000 people will end up unemployed.

The shutdowns have affected both smaller and larger operators. Out of the 1,037 shops that shut down, 700 were William Hill outlets. Ladbrokes had to close 198 shops and together Coral and Betfred closed 70 outlets.

What does the future of UK gambling look like?

Considering harsher regulations for online gambling, and recent restrictions on FOTBs, it’s perhaps not that surprising to see the British gambling industry contract.

By the look of things, the future of UK gambling seems to bee online. The online gambling market grew by 0.1% this year, but this number is likely to increase, considering the gloomy forecasts of the UK’s retail betting shops’ future.

Furthermore, increased revenue from online slots and online roulette, along with a 7% increase in yield for companies providing software to online gambling operators, also suggest that a lot of the revenue will be generated online.

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