iGB Intelligence reports iGB Market Monitor December 2017 | Page 7

Part 1: The UK market – a split screen has to be a ceiling,” he adds. “A market cannot company released its results in early November just continue to grow indefinitely.” for the year to March 2017 showing total net Ed Birkin, analyst with H2GC, agrees that the gaming revenues topping £2bn for the first time. double-digit market-wide growth of the early Conservatively, the UK is worth around a quarter years of this decade are behind us. “One of the of the total or around £500m in NGR (which key reasons is that there is a finite number of perhaps not coincidentally is pretty much level customers in the UK, and we’ve reached the point pegging with Sky Bet). This level of earnings (and where the incremental online gaming customer is profits) has a compounding effect as bet365 can hard to find – and those new customers are likely outspend any of the competition, both in terms to be lower value. Therefore, industry growth will of investment and marketing. We have mentioned largely come from increased spend from existing before how bet365 is likely to be one of the UK’s customers.” few unicorns (that is, a private company valued Our an alysis of the growth rates from the third at over £1bn – in bet365’s case, it would be many quarter (and the annual figures for bet365 and billions), but it also bears some relation to the Sky Bet) certainly show that growth across the internet giants of the world having hit upon what sector appears to be harder to come by than it would appear to be the perfect mix of product, has been (see table 1). market and competency. The challenge for the It should be noted that – as explained below rest of the online industry both in the UK and – these growth rates are not only UK growth globally is just keeping up. After a pause in the rates. With most of them the UK growth rate is growth rate the year before – to a mere 5% – largely hidden from view and even when there is bet365 enjoyed revenue growth in the year to an explicit reference to it, it will often be sports March of 39%. Given the company’s size, that is wagering growth or new active customers. truly phenomenal. Market breakdown Leading lights bet365 Sky Betting & Gaming Much has been written about the success of Sky Betting & Gaming. In the year to June, the bet365 over the years, including when the company achieved total revenue growth of The only company in the UK that can truly say it is matching bet365’s rise in growth rate is Table 1: Growth rate comparison Company Period % net revenue growth % sports growth % gaming growth % UK revenues (e) SBG FY 2017 38 46 27 100 bet365 FY 2017 39 n/d n/d 25 Ladbrokes Coral Q3 12 18 6 70 William Hill Q3 6 -1 18 70 Paddy Power Betfair Q3 -3 -2 0 70 Stars Group Q3 17 n/d 43 6 Jackpotjoy Q3   n/a 14 80 GVC Q3 13 3 19 10 Rank Q118 19 n/a 19 100 888 H1 6 35 6 39 iGaming Business Market Monitor • December 2017 4