Abstract
About this report
The UK gambling market has undergone far-reaching change over the near two years since the implementation of the Gambling Act in September 2007. All sectors of the industry now face a raft of new challenges and opportunities, and the betting shop market is no exception. With a shifting product and customer base, and facing new competition from online rivals, high-street bookmakers are embarking on a period of change, albeit one whose scale and nature is yet to become fully clear.
The market at least has solid foundations from which to adapt to the new gambling environment. More than £4 billion was spent in betting shops during 2008 (net expenditure), and profitability is expected to be more robust during the recession than it is in many other leisure sectors. The popularity of Fixed Odds Betting Terminals (FOBTs) has underpinned much of this success, but cannot be expected to sustain recent levels of revenue growth over the longer term. The traditional staples of dog and horserace betting appear to be in sustained decline, and with consumers keener on simpler products they understand, accelerating the ongoing rise of sports and football betting could take on a higher priority for operators.
This report assesses the current condition of the betting shop market on both sides of the counter, identifying trends within and outside the sector that will impact on its future development, and analysing consumers’ betting shop habits and their attitudes towards this type of gambling. In so doing, it tests the hypothesis that “new products, new technologies and new-found public interest in gambling are set to change fundamentally the nature of the betting shop experience over the next five years”.
Main issues
- Who bets in betting shops?
- Who bets on what?
- How recession-proof is betting shop gambling?
- Is betting on horse racing in terminal decline?
- How big a threat to betting shop business does online gambling present?
- What impact has the introduction of the Gambling Act had on the market?
- How are betting shops promoting their offer?
- How attractive to consumers is betting shop visiting?
Table of Contents
- Issues in the Market
- Main issues
- Definition
- Abbreviations
- Market in Brief
- Market breaks the £4 billion barrier
- Betting shops in the recession: Surviving, not prospering
- Gambling Act proves a generator of growth...
- ...but freedom to advertise quickly loses its appeal
- Web rivals pose biggest threat to shop trade
- Horserace betting under ever increasing pressure...
- ...but must retain a place in the new betting shop mix
- New audiences difficult to convince...
- ...but better shops and simpler processes could help
- Internal Market Environment
- Key points
- Licensing: Mixed reception for regime change
- Licence applications: Majors enjoying freedom of movement
- Gaming machines: FOBT bonanza starts to slow
- Extended hours: Benefits are location-linked
- Licence fees: Sliding scale set to promote consolidation?
- Figure 1: Betting shop licence fees, June 2009
- Burden of taxation: Too many calls for cash?
- Or has the market had it easy for too long?
- Technological advances not just online
- Corruption threatening to climb the agenda
- Gambling addiction an all-industry problem
- Figure 2: Calls made to GamCare, by gambling activity disclosed, 2005-07
- Broader Market Environment
- Key points
- Popularity of sport: Not all fans are natural bettors
- Figure 3: Any interest in named sports/pastimes, 2004-08
- Multichannel TV creating opportunities and new threats
- Figure 4: UK multichannel TV penetration, by platform, 2005-09*
- A different recession...
- Figure 5: Trends in selected areas of discretionary expenditure, at
current and constant prices, 1989-94
- ...leaves shop betting more vulnerable...
- Figure 6: Impact of the recession on leisure activities, April 2009
- ...but well placed to bounce back with the economy
- Figure 7: Trends in personal disposable income and consumer expenditure,
2004-14
- Upwardly mobile must hang on to their habits
- Figure 8: Forecast adult population trends, by socio-economic group,
2004-14
- An ageing population: Bad news for racing?
- Figure 9: Trends in the age structure of the UK population, by gender,
2004-14
- Competitive Context
- Key points
- Gambling market competition intensifies...
- Figure 10: Gambling activities in past year, all and past-year gamblers,
by gender, 2007
- ...with online sector the major threat...
- ...and exchanges bringing biggest changes
- Gambling now an accepted part of the leisure mainstream
- Figure 11: Consumer expenditure on selected leisure goods and
activities, 2003-08
- Strengths and Weaknesses in the Market
- Strengths
- Weaknesses
- Market Size and Forecast
- Key points
- Spending breaks £4 billion barrier
- Figure 12: UK betting shop market size, by value* and volume, 2005-14
- Will efforts to stand still sap stamina for the future?
- Segment Performance
- Key points
- FOBTs become a major market force...
- Figure 13: UK betting shop expenditure, by segment, 2003-09
- ...but the boom years are coming to an end
- Can racing' s poor form be reversed?
- Market Share
- Key points
- Market share to be more important than estate size
- Figure 14: UK betting shop market, by number of outlets, 2009
- Smaller players could be most expansionist
- Companies and Products
- Key points
- William Hill
- Figure 15: William Hill key financials, 2007-08
- Figure 16: William Hill betting shops gross win, by segment, 2007-08
- Ladbrokes
- Figure 17: Ladbrokes key financials, 2007-08
- Figure 18: Ladbrokes betting shops gross win, by segment, 2007-08
- Coral
- Figure 19: Gala Coral key financials, 2007-08
- Betfred
- Figure 20: Lightcatch Limited betting operations, key financials, 2007-08
- Totesport
- Figure 21: Tote turnover, by segment, 2007-08
- Paddy Power
- Figure 22: Paddy Power UK betting shops, key financials, 2007-08
- Scotbet
- Figure 23: Scotbet key financials, 2007-08
- Brand Communication and Promotion
- Key points
- Television' s novelty wears off fast
- Figure 24: Leading off-course bookmakers' adspend, by medium, 2005-08
- Who Visits Betting Shops?
- Key points
- Very few have the visiting habit
- Figure 25: Betting shop usage, May 2009
- Older bettors retiring from racing...
- ...as shop visiting remains tied to workday routine
- What Do Visitors Bet On?
- Key points
- Shops still seen as the home of horse racing
- Figure 26: Activities done at betting shops, May 2009
- A broader focus can create room for growth
- Gaming and betting: Crossover traffic on a one-way street
- Figure 27: Activities done at the betting shops, by activities done at
the betting shops, May 2009
- Appendix -- Broader Market Environment
- Figure 33: Forecast adult population trends, by lifestage, 2004-14
- Appendix -- Who Visits Betting Shops?
- Figure 34: Visit to betting shops, by demographic sub-group, May 2009
- Appendix -- What Do Visitors Bet On?
- Figure 35: Activities done at the betting shops, by demographic
sub-group, May 2009
- Figure 36: Activities done at betting shops, by visit to betting shops,
May 2009
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