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Gambling Review - UK - December 2011

The UK’s land-based gambling market remains in recovery mode following the three-pronged hit it took in the final years of the last decade through the smoking ban, Gambling Act and economic recession.

That recovery remains patchy, fragile and vulnerable to the effect of a prolonged period of economic austerity and/or a return to recession in the short to medium term. However, a number of factors including venue development, technological advance and consumer interest are also creating underlying conditions for longer-term improvement, particularly if the government delivers on a number of proposed legislation and taxation reforms. This report assesses current trends in UK adults’ gambling habits, examines the factors influencing current and future patterns of interest in betting and gaming in land-based venues and identifies ways in which operators and brands can respond to the main themes emerging.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Consumer expenditure on gambling, 2006/07-2016-17
            • Downturn threatens the recovery
              • Market factors
                • Good habits to answer gambling’s perennial problem
                  • Smoke begins to clear
                    • Market segmentation
                      • Figure 2: Share of consumer expenditure on land-based gambling, by sector, 2010/11
                    • National Lottery and B2 machine revenues resilient
                      • The consumer
                        • Figure 3: Participation in gambling activities, October 2011
                      • Market leader Lotto least vulnerable to the downturn
                        • Fun factor gives non-Lotto gambling a platform for growth
                          • Figure 4: Attitudes towards gambling, October 2011
                        • What we think
                        • Issues in the Market

                            • Will the government amend taxation and legislation to help the industry?
                              • How can operators insulate themselves against another recession?
                                • Where are the industry’s main competitive threats coming from?
                                  • How can land-based venues retain the younger crowd?
                                    • How can other sectors reach the mass-market mainstream of Lotto play?
                                      • What do women really want in a gambling venue?
                                      • Future Opportunities

                                          • Trend: Play Ethic
                                            • Trend: Switch Off
                                            • Internal Market Environment

                                              • Key points
                                                • Legislators return to the table
                                                  • Tax to become a bigger burden
                                                    • Figure 5: Gambling taxation rates, 2009/10-2011/12
                                                  • Good habits to tackle problem gambling
                                                    • Figure 6: Problem gambling prevalence, by age, 1999-2010
                                                  • Investment for smokers sparks potential for growth
                                                    • Figure 7: Cigarette smoking, by participation in selected leisure activities, 2007-11
                                                  • Licensing freedoms spark bookies backlash
                                                  • Broader Market Environment

                                                    • Key points
                                                      • Punters look for value as odds lengthen on economic recovery
                                                        • Figure 8: GDP, PDI, consumer expenditure and savings, at current prices, 2006-16
                                                      • Seaside sector warms to holidaying at home
                                                        • Figure 9: Domestic holidays in the UK, volume and value, 2005-11
                                                      • Optimism of youth a key market driver
                                                        • Figure 10: Past year gambling prevalence, by age, 1999-2010
                                                      • Better-off player base hides threat to the high street
                                                        • Figure 11: Past year gambling prevalence, by personal income quintile, 2010
                                                      • Technology offers more than an online threat
                                                        • Figure 12: Smartphone penetration, July 2009-July 2011
                                                    • Competitive Context

                                                      • Key points
                                                        • Convenience gambling leads the way
                                                          • Figure 13: Most popular gambling activities participated in, by gender, 2010
                                                        • Online rivalry creates a case for more liberal casino laws
                                                          • Figure 14: Mode of participation in each activity in the past year, 2010
                                                        • Leisure competitors showing faster growth
                                                          • Figure 15: Consumer expenditure on selected leisure activities, 2006-10
                                                      • Who’s Innovating?

                                                        • Key points
                                                          • Healthy competition in the Lottery sector?
                                                            • Pub play gets competitive
                                                              • Tennis puts virtual betting in-play
                                                                • Facebook frees up advertising
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Market continues slow recovery
                                                                      • Figure 16: Consumer expenditure on gambling*, 2005/06-2016/17
                                                                    • Forecast
                                                                      • Figure 17: Forecast of consumer expenditure on gambling, 2006/07-2016-17
                                                                    • Forecast methodology
                                                                    • Segment Performance

                                                                      • Key points
                                                                        • Machine growth masks arcades’ plight
                                                                          • Figure 18: UK gambling market, by sector, 2008/09-10/11*
                                                                        • World Cup gives betting a timely boost
                                                                          • Casinos come out even
                                                                            • Bingo’s losing run continues
                                                                              • Pools miss out online and on the high street
                                                                              • Market Share

                                                                                • Key points
                                                                                  • Betting shops shuffle their pack
                                                                                    • Figure 19: Leading betting shop operators, by number of venues*, March 2010 and March 2011
                                                                                  • Bingo club closure rates begin to slow
                                                                                    • Figure 20: Leading land-based bingo club operators, by number of licences held, March 2011
                                                                                  • Westfield takes casinos into post-Act age
                                                                                    • Figure 21: Leading land-based casino operators, by number of venues, March 2010 and March 2011
                                                                                  • Pursuit of profit a high stakes game for machine operators
                                                                                    • Figure 22: Gaming machines in operation, by gambling market sector, 2010-11
                                                                                • Companies and Products

                                                                                  • Key points
                                                                                    • Camelot
                                                                                      • Ladbrokes
                                                                                          • Figure 23: Financial performance, Ladbrokes (UK Retail), 2009 and 2010
                                                                                        • William Hill
                                                                                            • Figure 24: Financial performance, William Hill, 2009 and 2010
                                                                                          • Gala Coral
                                                                                              • Figure 25: Financial performance, Gala Coral Group Limited, UK, 2009 and 2010
                                                                                            • Genting UK
                                                                                                • Figure 26: Financial performance, Genting Casinos UK Limited, 2009 and 2010
                                                                                              • Rank Group
                                                                                                  • Figure 27: Financial performance, the Rank Group, 2009 and 2010
                                                                                                  • Figure 28: Financial performance, by division, the Rank Group, 2009 and 2010
                                                                                                • International Game Technology (IGT)
                                                                                                    • Figure 29: Financial performance, IGT Global, 2009 and 2010
                                                                                                  • Inspired Gaming
                                                                                                      • Figure 30: Financial performance, Inspired Gaming, 2009 and 2010
                                                                                                    • Sportech
                                                                                                        • Figure 31: Financial performance, Sportech, 2009 and 2010
                                                                                                        • Figure 32: Financial performance, by division, Sportech, 2009 and 2010
                                                                                                    • Brand Communication and Promotion

                                                                                                      • Key points
                                                                                                        • Sports betting tops the table
                                                                                                          • Figure 33: Gambling operators’ UK adspend, by sector, 2007-11
                                                                                                        • Spend shifts towards TV and web
                                                                                                          • Figure 34: Gambling operators’ UK adspend, by media type, 2007-11
                                                                                                      • Gambling Activities

                                                                                                        • Key points
                                                                                                          • Lotto’s lure based on lucre – but other sectors stronger on fun
                                                                                                            • Figure 35: Participation in gambling activities, October 2011
                                                                                                          • Low-cost Lotto habits hardest to break
                                                                                                            • Campaigns to cut to the quick?
                                                                                                              • Casinos and bingo clubs play a social game with football
                                                                                                              • Gambling Venues

                                                                                                                • Key points
                                                                                                                  • Women head for shops, men buy online
                                                                                                                    • Figure 36: Gambling venues used, October 2011
                                                                                                                  • Young gamblers stay safe offline
                                                                                                                    • Big screen sport makes pub gamblers a mobile target
                                                                                                                      • Spectators slow to bet beyond horses
                                                                                                                      • Attitudes Towards Gambling

                                                                                                                        • Key points
                                                                                                                          • Fun begins at 45
                                                                                                                            • Figure 37: Attitudes towards gambling, October 2011
                                                                                                                          • Gambling becoming a rich man’s game?
                                                                                                                            • Food and gossip – not what women really want
                                                                                                                            • Gambling Target Groups

                                                                                                                              • Key points
                                                                                                                                • Figure 38: Gambling target groups, October 2011
                                                                                                                              • Lotto Lovers (39% of sample)
                                                                                                                                • What do they think and do?
                                                                                                                                  • Who are they?
                                                                                                                                    • Non-Starters (51% of sample)
                                                                                                                                      • What do they think and do?
                                                                                                                                        • Who are they?
                                                                                                                                          • Social Gamblers (5% of sample)
                                                                                                                                            • What do they think and do?
                                                                                                                                              • Who are they?
                                                                                                                                                • Cash-Cautious (5% of sample)
                                                                                                                                                  • What do they think and do?
                                                                                                                                                    • Who are they?
                                                                                                                                                    • Appendix – Internal Market Environment

                                                                                                                                                        • Figure 39: GamCare helpline callers and counselling service users, 2008/09-2010/11
                                                                                                                                                    • Appendix – Brand Communication and Promotion

                                                                                                                                                        • Figure 40: Gambling operators’ UK adspend – top 20 advertiser, 2007-11
                                                                                                                                                    • Appendix – Gambling Activities

                                                                                                                                                        • Figure 41: Most popular participation in gambling activities, by demographics, October 2011
                                                                                                                                                        • Figure 42: Next most popular participation in gambling activities, by demographics, October 2011
                                                                                                                                                        • Figure 43: Most popular gambling venues, by most popular participation in gambling activities, October 2011
                                                                                                                                                        • Figure 44: Most popular gambling venues, by next most popular participation in gambling activities, October 2011
                                                                                                                                                        • Figure 45: Attitudes towards gambling, by most popular participation in gambling activities, October 2011
                                                                                                                                                        • Figure 46: Attitudes towards gambling, by next most popular participation in gambling activities, October 2011
                                                                                                                                                        • Figure 47: Repertoire of participation in gambling activities, October 2011
                                                                                                                                                        • Figure 48: Repertoire of participation in gambling activities, by demographics, October 2011
                                                                                                                                                        • Figure 49: Participation in gambling activities, by repertoire of participation in gambling activities, October 2011
                                                                                                                                                        • Figure 50: Most popular gambling venues, by repertoire of participation in gambling activities, October 2011
                                                                                                                                                        • Figure 51: Attitudes towards gambling, by repertoire of participation in gambling activities, October 2011
                                                                                                                                                    • Appendix – Gambling Venues

                                                                                                                                                        • Figure 52: Most popular gambling venues, by demographics, October 2011
                                                                                                                                                        • Figure 53: Participation in gambling activities, by most popular gambling venues, October 2011
                                                                                                                                                        • Figure 54: Attitudes towards gambling, by most popular gambling venues, October 2011
                                                                                                                                                        • Figure 55: Repertoire of most popular gambling venues, October 2011
                                                                                                                                                        • Figure 56: Repertoire of most popular gambling venues, by demographics, October 2011
                                                                                                                                                        • Figure 57: Participation in gambling activities, by repertoire of most popular gambling venues, October 2011
                                                                                                                                                        • Figure 58: Most popular gambling venues, by repertoire of most popular gambling venues, October 2011
                                                                                                                                                        • Figure 59: Attitudes towards gambling, by repertoire of most popular gambling venues, October 2011
                                                                                                                                                    • Appendix – Attitudes Towards Gambling

                                                                                                                                                        • Figure 60: Attitudes towards gambling, by demographics, October 2011
                                                                                                                                                        • Figure 61: Gambling target groups, by demographics, October 2011
                                                                                                                                                        • Figure 62: Participation in gambling activities, by attitudes towards gambling, October 2011
                                                                                                                                                        • Figure 63: Most popular gambling venues, by attitudes towards gambling, October 2011
                                                                                                                                                    • Appendix – Target Groups

                                                                                                                                                        • Figure 64: Participation in gambling activities, by target groups, October 2011
                                                                                                                                                        • Figure 65: Most popular gambling venues, by target groups, October 2011
                                                                                                                                                        • Figure 66: Attitudes towards gambling, by target groups, October 2011

                                                                                                                                                    Companies Covered

                                                                                                                                                    • Aston Villa Football Club
                                                                                                                                                    • Betfred
                                                                                                                                                    • Blueprint Gaming
                                                                                                                                                    • Coral Eurobet plc
                                                                                                                                                    • Fédération Internationale de Football Association
                                                                                                                                                    • Full House
                                                                                                                                                    • Gala Coral Group Ltd
                                                                                                                                                    • Grosvenor Casinos
                                                                                                                                                    • Ladbrokes Ltd
                                                                                                                                                    • National Lottery Commission
                                                                                                                                                    • Paddy Power Plc
                                                                                                                                                    • Rank Group
                                                                                                                                                    • Sportech
                                                                                                                                                    • William Hill

                                                                                                                                                    Gambling Review - UK - December 2011

                                                                                                                                                    £1,995.00 (Excl.Tax)