Part 2: The UK market overview: at a crossroads
Questions about gaming that smaller operators are winning at the expense
One area where there would certainly seem to of bigger ones,” says Birkin at H2GC.
be open questions about whether scale has a
positive impact is in the casino and gaming arena.
Much has been made of comments from Paddy
Power Betfair chief executive Breon Corcoran
“But there have been new market entrants in
the past few years who continue to challenge
hard with significant marketing spend.”
As Davies at Canaccord Genuity puts it, while
during the company’s last trading statement in some “behemoths” in the market will be able to
early May to the effect that he felt the lacklustre see the benefits of scale, there is also evidence
gaming performance – where revenues rose a of how “some niche players developing new
mere 2% compared to a whopping 33% rise in products or more innovative marketing angles
sports betting – were due to tougher competition (are able) to drive superior performance”.
from smaller and more nimble competitors,
particularly at the more casual end of the market.
What we can see from the Gambling
But it will be developments when it comes to
the marketing and presentation of online offerings
that will be a determinant for the future winners
Commission figures is the casino vertical’s share
of the gaming market and just why it is important
and loser, suggests French from Cenkos.
“It’s about offering the right product to
that operators large and small are concentrating the right customer at the right time,” he says.
on ensuring they are gathering as much market “Personalisation will become increasingly
share as possible. important and this should favour larger operators
As the Market Monitor has noted before, slots
is the single largest product in the remote market,
with the ability to commit investment to this
innovation.”
worth £1.58bn in GGY in the year to September
The shadow of regulation
2016.
As previously mentioned, it is the shadow of
Online casino product
breakdown – year to Sept 2016
regulation that hangs over the market most at
£m
GGY
present.
Alongside the aforementioned CMA and ICO
enquiries, and the potential ramifications from
Card game 176.5 Other 166.6 Peer-to-peer 99.3 which is likely to have an effect at some level on
Slots 1,581 revenues in the sector.
Table game 377.9
Total
2,401.3
Source: UK Gambling Commission
Corcoran said that though the company has set
about remedial measures that he hoped would
the Triennial Review, we also will see in August
the implementation of the PoC tax on bonuses,
Indeed, Kelleher at Goodbody believes this
last factor will likely have the most impact on
the gaming sector. “I think that gaming-only
operators will struggle a bit when [that tax
change] comes in,” he says.
The fear for operators is that the slew of bad
bear fruit in the coming months, he had “not been news might be a rolling process. The likelihood
happy with the speed of progress”. that the Commission might resort to a licence
Yet in using this phrase this he might be butting
suspension (effectively killing a UK-facing
into one of the more obvious facts about scale; business stone dead) to counter any licensing
it can be harder to turn things around when you breaches or other misdeed has increased
have the turning circle of an ocean-going tanker. markedly since the Commission assumed
“The biggest gains in market share have been
made by Sky Bet, so I don’t think that you can say
iGaming Business Market Monitor • June 2017
complete regulatory oversight of the online sector
just a few years ago.
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