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Casinos (including Online) - UK - September 2010

This report assesses the Casinos industry’s recent responses to the challenges of new legislation and the recession and anticipates potential future trends and opportunities, by examining the hypothesis that “the normalisation of gambling as a mainstream leisure activity is creating an opportunity for both land-based and online casinos to increase their market share”.

  • Growth in online casino gambling has compensated for a continued decline in land-based venues, with total casino expenditure in the UK expected to hit £1.15 billion in 2010 – up 2.7% on 2009.
  • Admission growth has not translated into increased revenues, as new customers have tended to be more casual and lower spending in nature, particularly where table gaming is concerned.
  • Fear of losing more than they can afford remains a real barrier preventing many people from visiting casinos. This is a particularly strong deterrent for women and younger consumers.
  • Growth in the number of one-person households is driving up demand for online entertainment, including gambling, as well as creating a need for out-of-home socialising that venues like casinos can tap into.
  • Current and potential casino visitors are more likely than lapsed visitors to be motivated to go to casinos by recommendations from friends and family. Word of mouth could therefore affect loyalty to particular casinos amongst current visitors, or help get potential players through the door.
  • Extra entertainment and variety of games in casinos appeal most to the younger age groups within which casino visiting is already comparatively strong. However, elements of customer service and value for money are of particular importance to 25-44-year-olds – the age range within which consumers are most likely to lose the visiting habit.

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Table of contents

  1. Issues in the Market

      • Main issues
        • Definition
          • Abbreviations
          • Future Opportunities

            • A first class experience for third age travellers
              • Best fit – for visitors and hosts
                • Realism as escapism
                  • Serving connectoholics and socialites
                  • Market in Brief

                    • Low profile is handicap against betting
                      • Recent growth masks underlying difficulties
                        • More visits, but less money on the table
                          • Newcomers need to move on from the bar...
                            • ...but are inhibited by fear of the unknown
                              • Similar players, differing motivations
                                • Potential of technology worth a spin
                                  • Legislative change still digging up bones of contention...
                                    • ...while taxation remains a common concern
                                      • More games for single players
                                        • Few spaces at the table
                                        • Internal Market Environment

                                          • Key points
                                            • Land-based casinos: Access few areas...
                                              • Figure 1: Number of operating UK casinos, by region, 2008-10
                                            • ...and little appetite for expansion
                                              • Figure 2: Potential new casino numbers, 2010
                                            • No limits online
                                              • Gambling Act still casts a long shadow
                                                • Machine numbers the new battleground
                                                  • Figure 3: Casino gaming machine permitted numbers, July 2010
                                                • Europe moves towards online licensing
                                                  • Taxation troubles the market’s only sure bet
                                                    • Figure 4: Gaming duty rates, 2010
                                                    • Figure 5: Amusement machine licence duty rates, 2007-11
                                                    • Figure 6: UK remote casino operating licence costs, 2010
                                                  • Casinos on safer ground with problem gambling
                                                    • Figure 7: Gambling activities favoured by problem gamblers, 2007
                                                  • Broadband on a hot streak
                                                    • Figure 8: Broadband penetration, by demographics, 2004-09
                                                  • TV proves a turn-off
                                                    • Mobile arrives as the new game in town
                                                      • Figure 9: Ownership of mobile devices, April 2009-April 2010
                                                  • Broader Market Environment

                                                    • Key points
                                                      • Market rides out worst of recession
                                                        • Figure 10: GDP, PDI, consumer expenditure and savings, at constant 2005 prices, 2005-15
                                                      • Betting on grey as casinos look to the lapsed
                                                        • Figure 11: Trends in the age structure of the UK population, by gender, 2005-15
                                                      • Upmarket player pool continues to grow
                                                        • Figure 12: Forecast adult population trends, by socio-economic group, 2005-15
                                                      • Ask the home-alone out to play
                                                        • Figure 13: UK households, by size, 2005-15
                                                      • You are here: Putting casinos on the visitor map
                                                        • Figure 14: Domestic and inbound tourism, 2006-10
                                                    • Competitive Context

                                                      • Key points
                                                        • Access, familiarity and trust give gambling rivals an edge
                                                          • Figure 15: Participation in gambling activities, 2009-10
                                                        • A small stake in the UK leisure market
                                                          • Figure 16: Consumer expenditure on selected leisure activities, 2005-10
                                                        • Online casinos trail betting and poker but lead the field by a neck
                                                          • Figure 17: Remote gambling participation, by activity, 2006-10
                                                      • Strengths and Weaknesses in the Market

                                                          • Strengths
                                                            • Gambling’s new leisure status
                                                              • Potential of technology
                                                                • An expanding offer
                                                                  • Appeal in the impulse market
                                                                    • Little cannibalisation
                                                                      • Weaknesses
                                                                        • No room for expansion
                                                                          • Increasing tax burden
                                                                            • Media image
                                                                              • Competitive pressures
                                                                                • Limited trust online
                                                                                • Who’s Innovating?

                                                                                  • Key points
                                                                                    • Live from the floor
                                                                                      • Operators go electric
                                                                                        • 3D not just for TV
                                                                                          • Gaming by invite
                                                                                          • Market Size and Forecast

                                                                                            • Key points
                                                                                              • Expenditure: Web growth shores up subsidence on land
                                                                                                • Figure 18: Consumer expenditure on casino gaming, 2005-15
                                                                                              • Table gaming takes a hit
                                                                                                • Figure 19: Casino drop and house win, 2006-10
                                                                                              • Provinces struggle to bring big spenders to the table
                                                                                                • Figure 20: Casino drop and house win, by region, 2009-10*
                                                                                              • Admissions: Retaining the gains of the Gambling Act
                                                                                                • Figure 21: Casino admissions, 2006-10
                                                                                              • Spend bounces back in restaurant and bar
                                                                                                • Figure 22: UK casino expenditure per visit, 2006-10
                                                                                            • Segment Performance

                                                                                              • Key points
                                                                                                • Online growth trims land-based lead
                                                                                                  • Figure 23: Consumer expenditure on casino gaming, by segment, 2006-10
                                                                                                • Core gaming segment in decline
                                                                                                  • Figure 24: Consumer expenditure in casinos, by sector, 2006-10
                                                                                                • Newcomers drawn to the straightforward to play
                                                                                                  • Figure 25: Casino drop, by game, 2008-10
                                                                                              • Market Share

                                                                                                • Key points
                                                                                                  • Big three remain dominant on land
                                                                                                    • Figure 26: Leading land-based casino operators, by number of venues, 2010
                                                                                                  • Bookmakers the consumer’s favourites online
                                                                                                    • Figure 27: Leading online gambling operators, by unique visitor numbers, May 2010
                                                                                                • Companies and Products

                                                                                                  • Key points
                                                                                                    • Land-based operators
                                                                                                      • Genting UK
                                                                                                        • Rank Group
                                                                                                            • Figure 28: Selected financial data, Grosvenor Casinos*, 2008 and 2009
                                                                                                            • Figure 29: Grosvenor Casinos*, admissions and spend per head, by region, 2008 and 2009
                                                                                                          • Gala Casino
                                                                                                              • Figure 30: Selected financial data, Gala Casino, 2007 and 2008
                                                                                                            • London Clubs International
                                                                                                              • Others
                                                                                                                • Online operators
                                                                                                                  • 888
                                                                                                                    • Figure 31: 888 Holdings B2C revenues, by product, 2008 and 2009
                                                                                                                    • Figure 32: 888 Holdings total operating income, by geographical market, 2008 and 2009
                                                                                                                  • Ladbrokes
                                                                                                                    • Figure 33: Ladbrokes online casino net revenues, 2005-09
                                                                                                                  • William Hill
                                                                                                                      • Figure 34: William Hill e-gaming revenues, 2009
                                                                                                                    • Betfair
                                                                                                                      • Others
                                                                                                                      • Who Goes to Casinos?

                                                                                                                        • Key points
                                                                                                                          • Thanks but no thanks – it’s nothing personal
                                                                                                                            • Figure 35: Casino visiting, June 2010
                                                                                                                          • Potential to player: All about the product
                                                                                                                            • Older players leave their habits on the plane
                                                                                                                              • Escapists expecting Mr Bond
                                                                                                                              • Why Do We Go To Casinos?

                                                                                                                                • Key points
                                                                                                                                  • Does inexperience keep us hiding in the bar?
                                                                                                                                    • Figure 36: Factors influencing casino visiting, June 2010
                                                                                                                                  • Recommendation comes highly recommended
                                                                                                                                    • Value and service can extend our visiting lives
                                                                                                                                    • What Do We Think About Casinos?

                                                                                                                                      • Key points
                                                                                                                                        • Casino drinkers and diners remain gamblers first and foremost
                                                                                                                                          • Figure 37: Attitudes towards casinos, June 2010
                                                                                                                                        • Safeguarding our shirts
                                                                                                                                          • Fancy some chips?
                                                                                                                                            • Casino visitors happy to stay offline
                                                                                                                                            • Who Plays Online Casinos?

                                                                                                                                              • Key points
                                                                                                                                                • Casinos remain occasional online destinations
                                                                                                                                                  • Figure 38: Online casino play, July 2010
                                                                                                                                                • Sports bettors can make casino play a more regular fixture
                                                                                                                                                  • Lottery offers a ticket to new markets
                                                                                                                                                  • Where Do We Play Online?

                                                                                                                                                    • Key points
                                                                                                                                                      • A non-specialist market...
                                                                                                                                                        • Figure 39: Most popular online casinos, July 2010
                                                                                                                                                      • ...with players as fickle as fortune
                                                                                                                                                      • Why Do We Play Casino Games Online?

                                                                                                                                                        • Key points
                                                                                                                                                          • Players favour free money – but prefer it from their favourites
                                                                                                                                                            • Figure 40: Attitudes towards online casinos, July 2010
                                                                                                                                                          • Regulars ready for mobile
                                                                                                                                                            • Niche players can offer more than big brand basics
                                                                                                                                                            • Why Don’t We Play Casino Games Online?

                                                                                                                                                              • Key points
                                                                                                                                                                • Leaving the table: It’s all about the money
                                                                                                                                                                  • Figure 41: Reasons for stopping online casino gambling, July 2010
                                                                                                                                                                • Not gambling, not bothered
                                                                                                                                                                  • Figure 42: Reasons for never having played online casino games, July 2010
                                                                                                                                                                • A preference for chips over clicks
                                                                                                                                                                  • Inexperience reinforces prejudice – and likely to continue doing so
                                                                                                                                                                  • Appendix – Who Goes to Casinos?

                                                                                                                                                                      • Figure 43: UK casino visiting, by demographics, June 2010
                                                                                                                                                                      • Figure 44: Non-UK casino visitors, by demographics, June 2010
                                                                                                                                                                      • Figure 45: Casino visiting, by UK casino visiting, June 2010
                                                                                                                                                                      • Figure 46: Casino visiting, by non-UK casino visiting, June 2010
                                                                                                                                                                  • Appendix – Why Do We Go To Casinos?

                                                                                                                                                                      • Figure 47: Most popular factors influencing casino visiting, by demographics, June 2010
                                                                                                                                                                      • Figure 48: Next most popular factors influencing casino visiting, by demographics, June 2010
                                                                                                                                                                      • Figure 49: Factors influencing casino visiting, by UK casino visiting, June 2010
                                                                                                                                                                      • Figure 50: Factors influencing casino visiting, by non-UK casino visiting, June 2010
                                                                                                                                                                      • Figure 51: Factors influencing casino visiting, by most popular factors influencing casino visiting, June 2010
                                                                                                                                                                      • Figure 52: Factors influencing casino visiting, by next most popular factors influencing casino visiting, June 2010
                                                                                                                                                                  • Appendix – What Do We Think About Casinos?

                                                                                                                                                                      • Figure 53: Most popular attitudes towards casinos, by demographics, June 2010
                                                                                                                                                                      • Figure 54: Next most popular attitudes towards casinos, by demographics, June 2010
                                                                                                                                                                      • Figure 55: Attitudes towards casinos, by UK casino visiting, June 2010
                                                                                                                                                                      • Figure 56: Attitudes towards casinos, by non-UK casino visiting, June 2010
                                                                                                                                                                      • Figure 57: Attitudes towards casinos, by most popular factors influencing casino visiting, June 2010
                                                                                                                                                                      • Figure 58: Attitudes towards casinos, by next most popular factors influencing casino visiting, June 2010
                                                                                                                                                                      • Figure 59: Attitudes towards casinos, by most popular attitudes towards casinos, June 2010
                                                                                                                                                                      • Figure 60: Attitudes towards casinos, by next most popular attitudes towards casinos, June 2010
                                                                                                                                                                  • Appendix – Who Plays Online Casinos?

                                                                                                                                                                      • Figure 61: Online gambling participation – ever done, by demographics, July 2010
                                                                                                                                                                      • Figure 62: Online gambling participation – done in last year, by demographics, July 2010
                                                                                                                                                                      • Figure 63: Online gambling participation – do regularly, by demographics, July 2010
                                                                                                                                                                      • Figure 64: Online gambling participation – do occasionally, by demographics, July 2010
                                                                                                                                                                      • Figure 65: Online gambling participation – done but not in the last year, by demographics, July 2010
                                                                                                                                                                      • Figure 66: Online gambling participation – never done, by demographics, July 2010
                                                                                                                                                                      • Figure 67: Online gambling participation, by online gambling participation – ever done, July 2010
                                                                                                                                                                      • Figure 68: Online gambling participation, by online gambling participation – done in last year, July 2010
                                                                                                                                                                      • Figure 69: Online gambling participation, by online gambling participation – do regularly, July 2010
                                                                                                                                                                      • Figure 70: Online gambling participation, by online gambling participation – do occasionally, July 2010
                                                                                                                                                                      • Figure 71: Online gambling participation, by online gambling participation – done but not in last year, July 2010
                                                                                                                                                                      • Figure 72: Online gambling participation, by online gambling participation – never done, July 2010

                                                                                                                                                                  Companies Covered

                                                                                                                                                                  • 888 Holdings Plc
                                                                                                                                                                  • A&S Leisure
                                                                                                                                                                  • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                  • Apollo Advisors, L.P.
                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                  • Baccarat
                                                                                                                                                                  • Bet365 Limited
                                                                                                                                                                  • Betfair
                                                                                                                                                                  • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                  • Caesars Entertainment
                                                                                                                                                                  • Candover Investments plc
                                                                                                                                                                  • Cassava Enterprises (Gibraltar) Ltd
                                                                                                                                                                  • Cinven Ltd
                                                                                                                                                                  • Co-operative Group
                                                                                                                                                                  • Coral Eurobet plc
                                                                                                                                                                  • Council of Mortgage Lenders
                                                                                                                                                                  • Crown Limited
                                                                                                                                                                  • Department for Culture Media and Sport
                                                                                                                                                                  • Empire Cinemas Ltd
                                                                                                                                                                  • Facebook, Inc.
                                                                                                                                                                  • Freeview
                                                                                                                                                                  • Gala Coral Group Ltd
                                                                                                                                                                  • Gambling Commission
                                                                                                                                                                  • Genting Stanley
                                                                                                                                                                  • Government Actuary's Department (GAD)
                                                                                                                                                                  • Grosvenor Casinos
                                                                                                                                                                  • Guoco Leisure Ltd.
                                                                                                                                                                  • Harrah's Entertainment Inc.
                                                                                                                                                                  • Isle of Capri Casinos Inc.
                                                                                                                                                                  • J. Sainsbury
                                                                                                                                                                  • Kantar Media
                                                                                                                                                                  • Ladbrokes Ltd
                                                                                                                                                                  • Lidl (UK)
                                                                                                                                                                  • London Clubs International
                                                                                                                                                                  • London Stock Exchange plc
                                                                                                                                                                  • Market & Opinion Research International (MORI)
                                                                                                                                                                  • Marks & Spencer
                                                                                                                                                                  • Mecca Bingo Limited
                                                                                                                                                                  • mmO2 plc
                                                                                                                                                                  • National Exhibition Centre
                                                                                                                                                                  • National Lottery Commission
                                                                                                                                                                  • NEC Corporation
                                                                                                                                                                  • Netplay TV Services Ltd
                                                                                                                                                                  • Netto Foodstores Ltd
                                                                                                                                                                  • Orange plc (UK)
                                                                                                                                                                  • Paddy Power Plc
                                                                                                                                                                  • PartyGaming
                                                                                                                                                                  • Playboy Enterprises
                                                                                                                                                                  • Playtech
                                                                                                                                                                  • Sky Vegas
                                                                                                                                                                  • T-Mobile (UK) Ltd
                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                  • The Rank Group PLC
                                                                                                                                                                  • Virgin Media Ltd
                                                                                                                                                                  • Virgin Mobile
                                                                                                                                                                  • Vodafone Group Plc (UK)
                                                                                                                                                                  • Waitrose
                                                                                                                                                                  • William Hill
                                                                                                                                                                  • Wm Morrison Supermarkets

                                                                                                                                                                  Casinos (including Online) - UK - September 2010

                                                                                                                                                                  US $2,583.33 (Excl.Tax)