The Online Gambling Industry in the UK 2021
There are now more casinos online than ever before. The UKGC released industry statistics back in November 2020 that showed that the growth in the number of new casinos has not necessarily resulted in a growth in the gambling market. The statistics are taken from the period April 2019 to May 2020 and are correlated back to the previous period.
The Decline of Offline Gambling
The view that the market has not grown is a very shallow reading of the data though. The overall gambling market in the United Kingdom did shrink slightly year on year with total gross gaming yield dropping by 4.5% from £14.2bn to £10.2bn. This looks like a market in heavy decline but there are a number of external factors that would have played a part in the market contraction.
This is the first year in the last since the crash of 2008/2009 where we have seen the market shrink. The number of betting premises across the UK dropped by a massive 6% with many land based establishments struggling to survive in the new gambling climate.
What is driving the market contraction?
There were a number of factors that influenced the decline in the gambling market. There has been a steady migration of customers away from land-based businesses towards online business across various sectors for the past 10 years but this couldn’t have been the only factor.
A number of high-profile sporting events were canceled or delayed over this period which resulted in a lower number of bets taking place on sports. This would have been a major impairment for bookmakers that would have been looking to cash in on horse racing, football and the Olympics that were all delayed.
The lockdowns forced brick and mortar businesses to close their doors would also have hindered the activity of local bookmakers and casinos. The land-based betting shops and casinos would have been forced to close their doors and in turn, lose a massive amount of revenue. This pattern was repeated in other industries too.
The natural movement away from land based premises to online businesses continued over this period. The convenience of playing casino games or placing bets on your mobile was already applying pressure to land based gambling businesses. The promotions, odds and innovation shown by online gambling businesses has increasingly eaten away at those business that refuse to adapt.
The Growth of Online Casinos
The most glaring statistic we spotted from the UKGC report was that remote betting, bingo and casino revenues managed to grow over this period despite the decline of the overall industry. Whilst the industry contracted 0.6%, the online gambling business grew by a massive 8.1%.
This means that remote gambling is now the largest combined sector in the UK. This industry is now worth in excess of £5.7bn, incredible 39.9% of the total gambling market in the United Kingdom.
What is driving market growth?
There were a number of factors that drove growth in the online sector. The continued innovation of online businesses to improve the product for the customer would have been a contributor.
The most significant driver would have been the closing of land based businesses during the lockdowns. Customers that would normally have gambled locally were forced into doing so online. This growth was achieved even with a number of high profile sporting events being cancelled.
The ability for online casinos to give new customers free spins and other promotions would also have driven growth in a period where customers were looking for additional value. The best casino bonuses in the UK can currently be found at Skol Casino with Vegas Lounge Casino also looking like a promising new online casino.
The UKGC also issued a large number of new remote gambling licenses in 2020 and 2021. This has seen a number of new casinos in 2021 which has increased the value proposition for customers. It has however created a risk of over-saturation within the market.
Hurdles Online Gambling Market
The future of online gambling is under immense pressure with additional taxes being applied, stricter regulation and restrictions on advertising coming into play. These steps have been taken by the UKGC to try and find a balance between allowing customers to choose how they want to gamble and protecting vulnerable people withing the United Kingdom.
Gambling is one of the oldest forms of entertainment with the endorphin rush that winning brings. It is also a highly addictive feeling and can lead to gambling addiction and must therefore be regulated very carefully. The danger comes with over regulation.
It must still be profitable for an online casino to operate in the UK whilst adhering to local laws. This is key because if too much of the value for casino owners is taxed and operations become too difficult to maintain, unregulated players will enter the market. They will not be subject to the same rules and may be able to offer customers better odds and bigger bonuses.
If this is combined with a ban on advertising, then it becomes very difficult for customers to know the difference between legitimate and black casinos. This then creates a situation where players have no protection at all and the primary objective of the UKGC cannot be achieved.
The online gambling industry in the UK is looking strong in 2021 but there are some danger flags that should not be ignored. If we want to ensure that online gaming remains safe for players and attractive to operators, the dialog between the regulators and casino owners needs to improve.
Last Updated on June 23, 2021