Part 2: The UK market overview: at a crossroads
UK remote market breakdown- year to Sept 2016(£ m)
Pool betting 30.2
Casino 2401.3
Source: UK Gambling Commission
The current picture
Betting 1710.8
Betting exchange
170
Bingo 149
This is now, however, entirely evident from the most recent figures from the Gambling Commission.
Released in May, the figures for the year to September 2016 show that remote gambling is now the biggest sector within the UK market, topping both the national lottery(£ 3.27bn) and the non-remote betting sector(£ 3.4bn).
The total revenue figure showed total gross gaming yield( GGY) from remote operations rising to £ 4.46bn for the 12 months, compared with a figure of £ 4.23bn in the 12 months to April 2016, representing a £ 230m or 5.5 % rise.
However, significantly the figure for the year to March has been revised downwards from £ 4.46bn for reasons that go unexplained. We shouldn’ t be all that surprised.
From a practical point of view, the system of reporting figures is still bedding in since it was introduced in November 2014.
Yet the downward revision makes it harder to discern the overall market direction – given a 5.5 % margin of error it might well yet be the case that the market was essentially flat between April and September last year, a period, lest we forget, when there was a major summer football tournament taking place.
Paul Leyland, analyst at gambling consultancy
Regulus Partners, points out that in terms of overall market sizing, year-on-year comparisons and benchmarking remains“ as much an art as a science despite much better point of consumption reporting”.
No surprise, then, that when the analysts are consulted over where the market is heading, there is a large degree of uncertainty.
Looking at the growth
Given the sheer scale of the UK online market at present, it should be no surprise that among the market commentators there is a split about whether the market will continue to grow at the rate of between 15-20 % that has been assumed for the past five years or more.
Simon French at Cenkos is clear that the innovation that has been seen in recent years, from products such as cash-out to the more recent request-a-bet, means that he expects the market to“ continue to grow”, though he doesn’ t put a figure on the quantum.
Similarly seeing the market in a positive light is Ed Birkin, analyst with H2 Gambling Capital( H2GC), who suggests that the comparatives with regard to sports betting margins for the second half remain reasonably positive, albeit he believes the pace of growth is likely to moderate.
“ There has been strong compound growth in the market for a number of years, so it has to be expected that growth will start to slow eventually,” he says.“ The prospect of further regulatory tightening could impact the market— especially if there were significant restrictions on advertising— but it’ s unlikely that this would have an impact on this year’ s growth forecasts.”
Both Birkin and Simon Davies, the leisure and gaming analyst at Canaccord Genuity, point to the hole in the football calendar caused by the lack of a major tournament, but when it comes to the macroeconomic clouds, Davies suggests that gambling spend has shown itself to be relatively resilient.
Yet Leyland at Regulus cautions here that though gambling is“ recession resilient” it is likely that online gambling participation has
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