Part 1 – The UK market - November 2014 - September 2015
the results statements. However, no one can be quite
recent results from the leading UK-listed operators
sure that the figures being reported to the Commission
shed some interesting light on how much the barrage
are absolutely free of bonuses. These issues will take
of advertising, sponsorship and other marketing efforts
time to resolve as best reporting practice takes time
is costing the operators.
to disseminate across the industry. Indeed, given the
The sector average across a selection of six firms
UK government’s stated intention to tax free plays as
with varying degrees of UK focus suggests the industry
of August next year, again future reporting from the
average spend on marketing as a percentage of net
Commission and eventually the UK Treasury may well
gaming revenue among the larger names in the sector
give us more clarity.
stands at circa 27.3%. (See table)
Clearly not all this spend is in the UK but many
The marketing battle
operators have spoken about increasing their UK spend
Given the size and apparent growth rate of the UK
ahead of and during the first years of operation of the
market, it is really no surprise to find that it is likely
UK’s Point of Consumption tax regime.
the most competitive market in the world and the
Ladbrokes said its marketing spend rose 78% over
marketing battle is visibly close fought. Here the most
the first half, and although it clearly had an effect
(digital revenue rose 41% over the period) it is a rate of
Marketing as a %
of NGR 1H16
Ladbrokes
Spend (£m)
55.3
marketing spend growth that likely will be unsustainable
%
once the company completes the merger with Coral.
35
Gala Coral*
30.8
24
William Hill
69.3
25
108.0
24.5
888
69.6
34.5
GVC
92.8
21
Paddy Power Betfair
Average sector %
*Gala Coral figures for nine months to July
Source: Company data, iGaming Business Market Monitor
27.3
Despite Jim Mullen, chief executive designate of
the combined entity, insisting the company would
“continue to invest in marketing because we can see
the benefits coming through”, the guidance from the
company is still around the 30% mark, though chief
financial officer Richard Snow added the caveat that it
would be “plus or minus” a few percentage points.
In comparison, Coral said its marketing/revenue
percentage was 21% in the third quarter, but in the
more representative year to date, was up at 24%.
iGaming Business Market Monitor – UK, Australia and Spain • September 2016
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