UK Online Sector Now Dominating its Gambling Industry

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Thursday, December 15th, 2016 | Written by Stephen Smith

The UK Gambling Commission (UKGC) has issued a new report detailing the state of the country’s gambling industry between April 2015 and March 2016. It’s the first report of this type to be released since the country changed its online gambling laws and mandated that all online gambling operators hold UK gambling licenses, with the first set of statistics revealing some surprising new trends. One of the biggest revelations is that the online gambling sector now represents the largest part of the UK’s gambling industry, while land-based casinos are currently its smallest segment.

Online Gambling 33% of Market

Online gambling now dominates the entire gambling market in the UK, with licensed iGambling operators generating total gross gambling revenues of £4.5 billion during the 12 months covered by the research, thus accounting for one-third of all gambling industry revenues. Commenting on the vertical’s stellar performance, Gambling Commission Programme Director James Green stated:

“Our latest statistics show that with the growth in online gambling the industry is increasingly taking a creative approach to using technology to engage consumers. As the online sector grows operators will also need to demonstrate that they are taking an equally innovative approach to ensuring gambling is safe for all online consumers.”

Breakdown of iGambling Revenues

When you drill down into the online gambling figures, casino games brought in the lion’s share of revenues at £2.6 billion, with around £1.75 billion of that amount derived from online slots.

Online sports betting was the second largest online gambling revenue generator, bringing in £1.8 billion, with about 37 percent of all bets placed on football games. In the meantime, horse racing accounted for 22 percent of revenues, and tennis a further 10 percent, while the remaining revenue was split between a range of other sporting activities, including golf, dog racing and cricket.

Finally, online bingo and exchange betting were the third and fourth largest sources of online gambling revenues in the UK, with bingo bringing in £152.6 million, and exchange betting £152 million, while online poker contributed £99 million towards the overall online gambling pie. Bringing up the rear was pool betting with £26 million in gross gaming revenues.

Online Poker Generates £99M

As mentioned, online poker generated £99 million in revenues, with that number aided by the country being one of the world’s most liberal markets. This means that online poker players in the UK are able to compete against their counterparts based in other regulated markets across the globe, unlike the majority of other European countries where ring-fenced markets are still the order of the day.

Case in point, while the UK and France have similar sized populations, the latter’s ring-fenced iPoker market only produced a meager $12.5 million for the country in 2015. This differential neatly demonstrates the huge benefits to a country opening up its iPoker market, and thus allowing for individual operators to ultimately offer bigger tournaments, games and prizes.

National Lottery and Sports Betting

The UK National Lottery was the second largest contributor to overall gross gambling revenue, bringing in £3.4 billion, while in-person sports betting at the country’s 8,709 high street betting shops was the third largest segment, generating £3.3 billion in gross gambling revenue.

Land-based Casinos Just £1BN

Between April 2015 and March 2016, land-based casinos had the smallest share of overall gross gambling revenues, only bringing in £1 billion. This means that the sector’s revenues were down by a worrying 14 percent compared to last year. The biggest revenue generator at brick-and-mortar casinos was roulette, which accounted for 43.4 percent of their business, with blackjack ranked second at 25.5 percent, and electronic gaming third with a 19.7 percent share of revenue. Overall, baccarat experienced the biggest decrease in revenues, falling by 88 percent from the previous report. Gaming machines, on the other hand, posted a revenue increase of 16 percent.

Responsible Gambling

During the period reviewed, 611,000 UK residents asked to be put on the self-exclusion list, barring them from gambling in the UK. That number is up significantly compared to the previous report where only 180,000 people asked to be excluded, and seeing that online gambling is now the biggest change to the industry, it’s safe to say that it is this new availability of gambling that has likely led to an increase in self-exclusion requests.