Today, an estimated 51% of the world’s population takes part in some form of gambling every year and the number has been steadily increasing. As a result, online gaming has been growing worldwide since 2003 at an annual average rate of 23%. This trend is expected to continue in the years ahead, as more countries allow gambling via the Internet and the competition for market share becomes increasingly intense.
While the United States has all but taken itself out of the picture since the passage of the Unlawful Internet Gaming Enforcement Act of 2006, other jurisdictions have been the beneficiaries of the world’s fascination with gaming online. This is especially true of the United Kingdom, where business is booming.
Dividing the Pie
According to an estimate based on figures provided by the Remote Gaming Association, worldwide online gross gaming revenues in 2011 surpassed $30.0 billion. Of that amount, no less than a 10% share belonged to the United Kingdom where, despite a poor economic climate, online gambling revenues expanded in 2010~2011 from £1.69 billion to £1.92 billion.
The market has been dominated by sports wagering, casino betting and poker play, supplemented by a growing segment for bingo. According to a recent report released by Mintel, “Online Gaming and Betting – UK,” bookmakers claimed some £845 million in 2011, led primarily by football (soccer) and the growth of in-play betting. Slots and roulette are the mainstays of the £450 million casino market, while poker has actually stalled somewhat following America’s “Black Friday” debacle in April 2011, holding steady at just below £300 million.
Currently, a shift is being observed in the demographics of those who frequent U.K. online gaming sites. The traditional segment of males aged 25 to 35 is witnessing a move toward individuals aged 18 to 34. Since 2004, women’s share of Internet users aged 16 to 74 has increased by more than 80%, while the same age group for men has seen a rise of 60%. This is being reflected in the U.K.’s gaming statistics, where an estimated 43% of all online players are now women.
In terms of specific markets, this shift has major implications. Men tend to play for excitement, while women do so for relaxation. The rise of the female sector has had an impact on the bingo market, which grew from just £78 million in 2007 to £326 million in 2011, surpassing poker. Bingo offers players relaxation in a social setting with a sense of community. This has been especially attractive to women, and they are increasingly playing in other gaming segments, too.
The Big Six
As U.K. online gaming revenue appears poised to surpass the £2.0 billion mark in 2012, with as much as 60% of the total being raked in by just a handful of service providers. They include the traditional London high street bookmakers, William Hill and Ladbrokes, along with three virtual gaming specialists — 888 and Betfair — plus Ireland’s Paddy Power. All six brands have mixed platforms offering sports wagering, casino games, bingo and poker, while Betfair is unique as a “betting exchange,” pitting customers against one another.
William Hill has been particularly aggressive in recent years, partnering with software developer Playtech to come up with ever-new applications and outlets, while also establishing a foothold in North America by becoming the first U.K. bookmaker licensed in Nevada. Shortly after obtaining approval in mid-2012, William Hill bought out the Las Vegas sportsbook known as Leroy’s, teamed up with P.T.’s Pubs to install betting kiosks throughout the state, and introduced WilliamHill.us as its American online presence.
On the horizon, U.K. online gaming providers are concentrating on expanding access through mobile applications. At present, only about one percent of global gaming revenue is generated by smartphones and mobile devices. Technology improvements are aiding the spread of remote gaming, and the sector is expected to experience explosive growth in the U.K. over the next several years.