Since 2003, online gambling in the UK has grown rapidly while traditional bricks-and-mortar gambling slowed, before declining in 2018-19 with the introduction of a £2 maximum stake on fixed-odd betting terminals.
In 2020, multiple lockdowns forced operators to close establishments, and gamblers moved their attention online.
As a result, online gambling now accounts for the majority of gross gambling yield (GGY). According to the UK Gambling Commission (UKGC), the remote segment accounted for 80% of GGY in betting, bingo and casino over the six months through September 2020. Growth in remote gambling has been supported by online participation, which has more than doubled from 8.3% of the adult population in 2013, to 16.9% in 2020, according the UKGC Gambling Participation Survey.
Reopening of retail
As the UK government began to loosen social distancing restrictions on 17 May 2021, allowing land-based gambling venues such as casinos, arcades, and bingo hall, overall activity in the online market slowed down. According to the UKGC, online GGY fell 7% to £496 million in June 2021, the sector’s lowest results since November 2020, and total bets decreased 10%. Double-digit GGY declines were recorded across all online verticals (betting, bingo, casino) except sports betting, which registered a 1% month-on-month increase to £242 million, with Euro 2021 taking place the same month.
This downward wager and GGY trends are likely to be temporary as high street and hospitality footfall and revenue increase over the summer months following the easing of restrictions, diverting attention away from gambling online and establishments.
June’s GGY remained below peak activity recorded during the lockdown period of January-to-April as individuals look for a distraction and an element of social interaction at home.
As consumer behaviour begins to normalise, remote gambling is still expected to continue to grow in popularity due to its accessibility, convenience of having multiple games under one roof and promotions.
Problem gambling
The recovery of the gambling and betting industry continues to face numerous obstacles.
Data from the UKGC indicates that between May and June 2021, the number of active players in online gambling increased 4%, in online real event betting by 9% and online slots by 1%. While this does not mean that more people started gambling throughout the COVID-19 pandemic, it does suggest individuals started to try new games as additional leisure time helped spur the uptake of new activities, indicative of a growing problem.
A July 2020 House of Lords report titled Gambling Harm – Time for Action noted online gambling soared in 2020 in the UK, with regular gamblers more than six times more likely to gamble online. Meanwhile, half the UK adults gamble at least once a month, while over 300,000 UK citizens are classed as ‘problem’ or ‘disordered’ gamblers. Young people were found to be most at risk as they look for ways to pass time or as a coping mechanism during the COVID-19 pandemic.
Multiple restrictions not only pushed gambling further online, but they also rendered individuals suffering from gambling addiction, those at risk of acquiring one and those in recovery, more vulnerable.
According to GamCare, which operates the National Gambling Helpline, said it had received 41,000 calls for help in the year through March 2021, a 9% increase on the previous year. The Hotline also reported a 28% increase in calls during Euro 2021 compared with the previous year, partly due to sporting events being triggering and partly because of gambling companies’ sponsorship and advertising.
Regulatory reviews
Regulation has increased over the past 18 months. Since 14 April 2020, the UKGC banned the use of credit cards. In December 2020, the Department for Digital, Culture, Media and Sport launched a wide-ranging review of the Gambling Act 2005, to ensure they are fit for the digital age.
Protections for online gamblers like stake and spend limits, advertising and promotional offers and whether extra protections for young adults are needed will all be explored, as well as a review on as well as the Gambling Commissions role and powers.
Other notable areas of interest have included:
- A potential ban on VIPs
- Loyalty schemes
However, this proposal has faced much criticism from Betting and Gaming Council, which noted the introduction of minimum age requirement of 25 has already caused the number of players enrolled to reduce by 70%.
In February 2021, the UKGC announced a set of new regulations on online slot machine games. The new rules, which will come into force in October 2021, will force users to manually spin with a 2.5 second wait between spins, as well as remove positive cues when the user has lost money.
Public perceptions and marketing
Tougher attitudes and public perception towards gambling and betting activities are likely to prompt increasingly precautionary behaviour, dampening the industry’s growth prospects. While not mandated by legislation, operators have taken it upon themselves to limit gambling and betting activity.
The Gambling and Betting Activities industry’s largest player, Flutter Entertainment plc, has developed its own three-step affordability test, while rival Entain has developed the advanced responsibility and care platform, which uses AI to detect if any individual’s gambling and betting activity becomes problematic so intervention and stop mechanisms can take place immediately.
Rising awareness over ESG issues and greater pressure from society for professional sports to be more socially responsible for fans and local communities has also resulted in a drop in advertising and sponsorship from gambling firms.
According to marketing agency Caytoo, the gambling industry accounts for 8.1% of all sponsorships across football, rugby and cricket, also half from 15.3% in 2019. The decline has been driven largely by football, where gambling’s share of sponsorship has decreased by more from 32.7% to 15.2%. A decline in advertising and sponsorships is expected to decrease triggers for problem gamblers and reduce reinforcing stimuli for other individuals, adversely affecting gambling and better activity.
Overall, remote gambling will continue to absorb a greater share of GGY, although its growth rate will likely be slowed by increasingly stringent regulation and tougher attitudes towards gambling and betting activity.
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