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Gambling Review - UK - April 2013

“The majority of consumers still prefer to visit bricks-and-mortar venues. However, land-based gambling sectors will have to adjust and improve their offering, as the online channel continues to grow. Online imitations generally offer the same games and markets, whilst odds and payouts can often exceed those offered in venues. As a result, service and experience is likely to become increasingly important.”

– Paul Davies, Senior Leisure Analyst

Some questions answered in this report include:

  • Will the National Lottery’s near monopoly be threatened by new entrants?
  • Are stores still convenient, or has online made gambling more accessible?
  • Are betting shops over-reliant on gaming machines?
  • Do casinos and bingo halls need a facelift in order to attract more consumers?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Forecast of consumer expenditure* on gambling**, 2007/08-2017/18***
            • Market drivers
              • Gambling not entirely recession-proof
                • Figure 2: Gambling spending trends in the past 12 months, September 2012
              • Price of Lotto increases for the first time
                • New lottery legislation and licensing opens up opportunities
                  • Casinos and bingo clubs insulated from online competition
                    • Figure 3: Amount wagered on remote gambling activities*, 2009/10-2011/12
                  • Target market for mobile gambling widens
                    • Figure 4: Smartphone and tablet penetration, 2011-13
                  • Market segmentation
                    • Figure 5: Share of consumer expenditure* on land-based gambling, by sector, 2011/12
                  • Lotteries and B2 gaming machines cloud damage felt elsewhere
                    • The consumer
                      • National Lottery still the most popular activity
                        • Figure 6: Participation in gambling activities, January 2013
                      • Lottery players less likely to branch out
                        • Figure 7: Repertoire of gambling activities, by participation in lottery and non-lottery activities, January 2013
                      • Gamblers still heavily reliant on bricks and mortar
                        • Figure 8: Gambling methods used, January 2013
                      • Online gamblers more likely to take part in multiple activities
                        • Figure 9: Repertoire of types of gambling activity (eg Lotto weekly draw, horseracing), by gambling method used, January 2013
                      • Two fifths of non-lottery gamblers bet for enjoyment
                        • Figure 10: Gambling behaviour, by non-lottery and lottery-only gamblers, January 2013
                      • High interest in localised lotteries
                        • Figure 11: Interest in a local lottery, by age, January 2013
                      • What we think
                      • Issues in the Market

                          • Will the National Lottery’s near monopoly be threatened by new entrants?
                            • Are stores still convenient, or has online made gambling more accessible?
                              • Are betting shops over-reliant on gaming machines?
                                • Do casinos and bingo halls need a facelift in order to attract more consumers?
                                • Trend Application

                                    • Trend: Carnivore, Herbivore, Locavore
                                      • Trend: Help Me Help Myself
                                        • Mintel Futures: Human
                                        • Market Drivers

                                          • Key points
                                            • Gambling not entirely recession-proof
                                              • Figure 12: Gambling spending trends in the past 12 months, September 2012
                                            • Public confidence may be starting to improve
                                              • Unemployment remains high in 2013 but down on a year ago
                                                • Figure 13: UK unemployment rate, Q1 2008-Q1 2013
                                              • Price of Lotto increases for the first time
                                                  • Figure 14: Estimated breakdown of prizes for new Lotto weekly draws, expected to launch in autumn 2013*
                                                • ‘Good causes’ become more prominent with Olympic funding
                                                    • Figure 15: Olympic champion Sir Chris Hoy presenting ‘Best Sport Project’ to a group of netballers, in Hyde, November 2012
                                                    • Figure 16: Cyclists Laura Trott and Jody Cundy with a group of young athletes, October 2012
                                                  • New lottery legislation and licensing opens up opportunities
                                                    • More gambling venues and opportunities
                                                      • Local councils bite back to prevent more clustering of betting shops
                                                        • Lottery and bingo players stay clear of addiction
                                                          • Figure 17: Prevalence of problem gamblers (% of those gambling on an activity in the past year), 2010
                                                        • Casinos and bingo clubs insulated from online competition
                                                          • Figure 18: Amount wagered on remote gambling activities*, 2009/10-2011/12
                                                        • Casino admissions steady in 2011/12, but bingo numbers decline
                                                          • Figure 19: Casino admissions, 2006/07-2011/12
                                                          • Figure 20: Bingo club admissions, 2007-11
                                                        • Online prompts ‘bet-in-play’ markets
                                                          • More live sport and more subscribers may increase engagement
                                                            • Target market for mobile gambling widens
                                                              • Figure 21: Smartphone and tablet penetration, 2011-13
                                                          • Who’s Innovating?

                                                            • Key points
                                                              • Health Lottery entices consumers with ‘free play’
                                                                • Betsofmates.com pits punters against professionals
                                                                  • Betfred launches in-shop TV channel
                                                                    • Fun event betting enjoys bumper year
                                                                    • Market Size and Forecast

                                                                      • Key points
                                                                        • Lottery and B2 gaming machines facilitate growth
                                                                          • Figure 22: Consumer expenditure* on gambling**, 2007/08-2017/18***
                                                                        • Forecast
                                                                          • Figure 23: Forecast of consumer expenditure* on gambling**, 2007/08-2017/18***
                                                                        • Forecast methodology
                                                                        • Segment Performance

                                                                          • Key points
                                                                            • Lotteries show no sign of slowing
                                                                              • Figure 24: UK gambling market, by sector, 2009/10-2011/12*
                                                                            • Lotto price rise may change the mix of ticket sales
                                                                              • Figure 25: Sales of draw-based National Lottery games, by game (year ending 31 March), 2006/07-2011/12
                                                                            • Betting shops see off online threat with machine growth
                                                                              • Figure 26: UK betting shops consumer expenditure*, by segment, 2010/11-2012/13**
                                                                            • Machine dilemma for casinos
                                                                              • Bingo clubs still feeling the weight of legislation
                                                                              • Market Share

                                                                                • Key points
                                                                                  • Number of betting shops remains steady
                                                                                    • Figure 27: Leading betting shop operators, by number of venues*, March 2011-September 2012
                                                                                  • Rank Group set to become casino market leader
                                                                                    • Figure 28: Leading land-based casino operators, by number of venues, March 2011 and March 2012
                                                                                  • Bingo operators consolidate in testing times
                                                                                    • Figure 29: Leading land-based bingo club operators, by number of licences held, September 2012
                                                                                  • Number of gaming machines continues to increase
                                                                                    • Figure 30: Gaming machines in operation, by gambling market sector, 2011-12
                                                                                  • Lotteries
                                                                                  • Companies and Products

                                                                                    • Key points
                                                                                      • Betfred
                                                                                          • Figure 31: Key financials, Done Brothers (Cash Betting) Limited*, 2011 and 2012
                                                                                        • Camelot Group plc
                                                                                            • Figure 32: Camelot’s financial performance, year ending 31 March 2006/07-2011/12
                                                                                          • Gala Coral
                                                                                              • Figure 33: Key financials, Gala Coral Group, 2011 and 2012
                                                                                            • Genting UK
                                                                                                • Figure 34: Key financials, Genting Casinos UK Limited, 2010 and 2011
                                                                                              • Ladbrokes
                                                                                                  • Figure 35: Key financials, Ladbrokes UK retail turnover, 2011 and 2012
                                                                                                • Rank Group
                                                                                                    • Figure 36: Key financials, the Rank Group, 2011 and 2012
                                                                                                    • Figure 37: Key financials, by division, the Rank Group, 2011 and 2012
                                                                                                    • Figure 38: Rank Group strategic overview
                                                                                                  • William Hill
                                                                                                      • Figure 39: Key financials, William Hill, 2011 and 2012
                                                                                                  • Brand Communication and Promotion

                                                                                                    • Key points
                                                                                                      • Total advertising expenditure continues to soar
                                                                                                        • Figure 40: Gambling operators’ UK adspend, by sector, 2009-12
                                                                                                      • Over half of adspend attributed to TV
                                                                                                        • Figure 41: Gambling operators’ UK adspend, by media type, 2009-12
                                                                                                        • Figure 42: Gambling operators’ UK adspend, by media type, 2012
                                                                                                    • Gambling Activities

                                                                                                      • Key points
                                                                                                        • Lottery retains wide-scale appeal
                                                                                                          • Figure 43: Participation in gambling activities, January 2013
                                                                                                        • Lottery players less likely to branch out
                                                                                                          • Figure 44: Repertoire of gambling activities, by participation in lottery and non-lottery activities, January 2013
                                                                                                        • Football punters cast a wide net
                                                                                                          • Figure 45: Participation in gambling activities, by football gamblers, January 2013
                                                                                                        • Lotto price increase may shift balance of play
                                                                                                          • Lottery a way to win early retirement
                                                                                                            • Figure 46: Participation in gambling activities, lottery and non-lottery, by age, January 2013
                                                                                                        • Gambling Channels

                                                                                                          • Key points
                                                                                                            • Gamblers still heavily reliant on bricks and mortar
                                                                                                              • Figure 47: Gambling methods used, January 2013
                                                                                                            • A third of gamblers aged 25-34 turn to online
                                                                                                              • Figure 48: Proportion of gamblers who use the online method, by age, January 2013
                                                                                                            • Online gamblers more likely to take part in multiple activities
                                                                                                              • Figure 49: Repertoire of types of gambling activity (eg Lotto weekly draw, horseracing), by gambling method used, January 2013
                                                                                                          • Gambling Behaviour

                                                                                                            • Key points
                                                                                                              • Control and convenience are key motivations for online players
                                                                                                                • Figure 50: Gambling behaviour, January 2013
                                                                                                              • Two fifths of non-lottery gamblers bet for enjoyment
                                                                                                                • Figure 51: Gambling behaviour, by non-lottery and lottery-only gamblers, January 2013
                                                                                                              • Experience is all
                                                                                                              • Interest in Alternative Gambling

                                                                                                                • Key points
                                                                                                                  • Opportunity for new localised lotteries
                                                                                                                    • Figure 52: Interest in alternative gambling activities, January 2013
                                                                                                                  • Existing lottery consumers the most interested
                                                                                                                    • Figure 53: Interest in a local lottery, by age, January 2013
                                                                                                                  • ‘Lucky dip’ may not just be for lottery
                                                                                                                  • Appendix – Market Size

                                                                                                                      • Figure 54: Forecast of consumer expenditure* on gambling**, 2012/13-2017/18***
                                                                                                                  • Appendix – Gambling Activities

                                                                                                                      • Figure 55: Participation in gambling activities, January 2013
                                                                                                                      • Figure 56: Most popular gambling activities, by demographics, January 2013
                                                                                                                      • Figure 57: Next most popular gambling activities, by demographics, January 2013
                                                                                                                      • Figure 58: Other gambling activities, by demographics, January 2013
                                                                                                                      • Figure 59: Least popular gambling activities, by demographics, January 2013
                                                                                                                      • Figure 60: Participation in gambling activities, by gambling methods used, January 2013
                                                                                                                      • Figure 61: Participation in gambling activities, by most popular statements about gambling behaviour, January 2013
                                                                                                                      • Figure 62: Participation in gambling activities, by next most popular statements about gambling behaviour, January 2013
                                                                                                                      • Figure 63: Repertoire of participation in gambling activities, by most popular gambling activities, January 2013
                                                                                                                      • Figure 64: Repertoire of participation in gambling activities, by next most popular gambling activities, January 2013
                                                                                                                  • Appendix – Gambling Channels

                                                                                                                      • Figure 65: Gambling methods used, January 2013
                                                                                                                      • Figure 66: Gambling methods used, by demographics, January 2013
                                                                                                                      • Figure 67: Gambling methods used, by most popular gambling activities, January 2013
                                                                                                                      • Figure 68: Gambling methods used, by next most popular gambling activities, January 2013
                                                                                                                      • Figure 69: Gambling methods used, by gambling methods used, January 2013
                                                                                                                      • Figure 70: Gambling methods used, by most popular statements about gambling behaviour, January 2013
                                                                                                                      • Figure 71: Gambling methods used, by next most popular statements about gambling behaviour, January 2013
                                                                                                                  • Appendix – Gambling Behaviour

                                                                                                                      • Figure 72: Gambling behaviour, January 2013
                                                                                                                      • Figure 73: Most popular statements about gambling behaviour, by demographics, January 2013
                                                                                                                      • Figure 74: Next most popular statements about gambling behaviour, by demographics, January 2013
                                                                                                                      • Figure 75: Gambling behaviour, by most popular gambling activities, January 2013
                                                                                                                      • Figure 76: Gambling behaviour, by next most popular gambling activities, January 2013
                                                                                                                      • Figure 77: Gambling behaviour, by most popular statements about gambling behaviour, January 2013
                                                                                                                      • Figure 78: Gambling behaviour, by next most popular statements about gambling behaviour, January 2013
                                                                                                                      • Figure 79: Gambling behaviour, by gambling methods used, January 2013
                                                                                                                      • Figure 80: Gambling behaviour, by interest in alternative gambling activities, January 2013
                                                                                                                  • Appendix – Interest in Alternative Gambling

                                                                                                                      • Figure 81: Interest in alternative gambling activities, January 2013
                                                                                                                      • Figure 82: Most popular interest in alternative gambling activities, by demographics, January 2013
                                                                                                                      • Figure 83: Next most popular interest in alternative gambling activities, by demographics, January 2013
                                                                                                                      • Figure 84: Interest in alternative gambling activities, by most popular gambling activities, January 2013
                                                                                                                      • Figure 85: Interest in alternative gambling activities, by next most popular gambling activities, January 2013
                                                                                                                      • Figure 86: Interest in alternative gambling activities, by gambling methods used, January 2013
                                                                                                                      • Figure 87: Interest in alternative gambling activities, by interest in alternative gambling activities, January 2013

                                                                                                                  Companies Covered

                                                                                                                  • Betfair
                                                                                                                  • Betfred
                                                                                                                  • Camelot Group plc
                                                                                                                  • Competition Commission
                                                                                                                  • Facebook, Inc.
                                                                                                                  • FremantleMedia Ltd.
                                                                                                                  • Gala Coral Group Ltd
                                                                                                                  • Grosvenor Casinos
                                                                                                                  • Guoco Leisure Ltd.
                                                                                                                  • Ladbrokes Ltd
                                                                                                                  • Mecca Bingo Limited
                                                                                                                  • National Lottery Commission
                                                                                                                  • Paddy Power Plc
                                                                                                                  • Rank Group
                                                                                                                  • Tote
                                                                                                                  • William Hill

                                                                                                                  Gambling Review - UK - April 2013

                                                                                                                  £1,995.00 (Excl.Tax)