At the end of November, the UK Gambling Commission (UKGC), published a report presenting evidence about the most recent changes in the country’s gambling landscape. The publication reflected on the shape and size of the UK gambling industry, including the impact of the Covid-19 pandemic, as well as the impact of macro-economic trends on customers’ gambling behaviours.
The UKGC revealed that, according to the Government’s Participation Survey 2021 to 2022 annual report, approximately 15 million people gamble on products licensed under the country’s Gambling Act 2005, approximately the same number of people who have visited a gallery or a museum at least once in 2021.
The industry regulatory body shared that it is important to not always consider British gambling as a uniform sector, especially from a consumer or industry perspective. On the contrary, it comprises a vast range of products that are currently used by many customers who play both at brick-and-mortar venues and online and for different experiences. The UKGC research into the reasons why British people gamble has shown that gambling can turn into an opportunity to socialise.
The local gambling sector has also faced the impact of different contexts. In some cases, these are adjacent sectors that are also classified as gambling, such as the National Lottery, or products that feature gambling-like mechanisms such as loot boxes.
Online Gambling Remains an Integral Part of Digital Economic Sectors in the UK
Online gambling remains an inseparable part of the wider digital landscape in terms of operator delivery and customer expectations. However, gambling, and online gambling, in particular, is now considered another digital sector in the country.
Part of the recent changes is driven by a consumer expectation of a smooth gambling experience that matches experience in other economic sectors, with this trend showing most clearly in the shift to mobile gambling services.
According to Ofcom data, adult internet users in the UK spend four hours online on a daily basis, with most of this time (about three hours) spent on smartphones. On the other hand, data gathered by an online tracker survey of the UK Gambling Commission in 2021 shows that 60% of online gamblers have used a mobile phone to participate in gambling.
New digital channels have also transformed other aspects of the sector, such as product delivery, in terms of products’ speed and volume, as well as the potential presence of non-traditional operators in the sector. The UKGC noted that the development of mobile technology has made the transformation of traditional destination gambling possible, making it function in a similar way to instant win games, especially when it comes to easy accessibility and convenience of play. A survey held by the UK gambling watchdog revealed that three in 10 online gamblers had placed an in-play bet in the last seven days, and a further 30% of online punters having done so in the last four weeks.
Ongoing digitalisation in the British gambling industry has also brought some changes in companies’ engagement with their customers, including marketing campaigns, personally-targeted enticements, or overall brand presence. And this transformation is getting more refined and more powered by data every year. The thing is that local customers are willing to get more personalised adverts and experiences across various media channels, with almost 50% of UK consumers who took part in the survey stating they would be glad if they got better-targeted recommendations in line with their interests. Unfortunately, increased personalisation in the sector can also increase gambling-related harm to vulnerable individuals.
Every aspect of the industry has been reflected by the sector’s supply chain, which is getting more and more complex every year, as it includes test houses, big data suppliers, authentication and fraud identification, as well as the implementation of advanced human and/or machine interfaces.
Gambling Sector’s GGY in 2021/2022 Only 2% Lower than Before Covid-19
The total number of Brits who gamble, and the associated Gross Gambling Yield (GGY) had remained relatively unchanged until the Covid-19 pandemic outbreak in 2020.
The UK Gambling Commission provided evidence that the headline level participation for products regulated by the country’s Gambling Act 2005 had been stable at approximately 32% of the country’s adult residents in the period from 2017 to 2019. The GGY rose by 4% for the same comparable period. It also became clear that gambling, except for bingo, was more popular among male than female gamblers, with the age group that was most likely to take part in gambling activities being the 25- to 34-year-olds.
According to the UKGC report, gross gambling yield associated with products regulated under the provisions of the Gambling Act 2005 decreased by around 16% for the year ending in March 2021. The substantial decline was attributed to the negative impact of the Covid-19 pandemic, which also reduced the difference between the number of men and women gambling in the country. The UK gambling regulatory body found that the number of female gamblers remained pretty much the same, while the participation of male gamblers was reduced.
The gambling industry watchdog also revealed that certain activities in 2021 were more popular amongst female than male gamblers, including scratchcards, society lotteries, slot and fruit machines in arcades, and the instant-win games offered by the National Lottery.
Since the UK Government relaxed Covid-19 restrictions in 2021 and local customers are once again able to access a variety of gambling products and services, the overall percentage of the adult population to gamble is still lower than the pre-pandemic rates (28%). However, the UKGC warned there are signs of an increase in retail gambling participation rates of young gamblers between 16 to 24, especially males. The industry gross gaming yield for products regulated under the Gambling Act 2005 was only 2% smaller in 2021/2022 than the one registered before the beginning of the coronavirus pandemic (2019/2020).
Digitalisation of the UK Gambling Sector Continues to Increase in the Longer Term
As previously reported by Casino Guardian, the movement of customers from retail to online gambling has remained a gradual and consistent trend over the Covid-19 pandemic. Although it was pretty much unchanged, the increase in spending on online gambling services appears to have been bigger and quicker than the one in the number of consumers.
The UKGC reported that the most significant change in the country’s gambling landscape is a shift to online play, which pretty much reflects people’s lives over the period. Globalisation and technological development have played a significant part in people’s lives, with gamblers no more being limited by opening hours, local events and other specific features of brick-and-mortar gambling.
With 94% of adult residents of the UK having access to the Internet in 2021, it is not surprising that there has been a gradual change of heart of local people who have been choosing to gamble online rather than gamble in person. This trend pretty much mirrors the changes registered in order sectors, including the increase in online grocery shopping or the increasing popularity of online banking services.
According to the results of a quarterly telephone survey held by the British gambling regulatory body in September 2022, the proportion of adults gambling online equalled the proportion of adults gambling in brick-and-mortar venues – 18%. In comparison, five years earlier, in-person gambling rates were almost double the size of online gambling participation rates. Despite that, the UKGC noted that the online gambling participation rates have still not returned to the ones from before the pandemic (24.4% in 2019).
The National Lottery also saw a customer shift from retail to online play. The long-term continuous increase in online participation was driven mostly by female rather than male gamblers – from 13.2% registered in September 2019 to 17.2% in September 2022. Male gambling participation has remained pretty much static during the last four years.
In addition, online gambling also generated a bigger gross gaming yield, with the figure rising from 42% in 2015/2016 to 61% in 2021/2022, excluding the products of the UK National Lottery. Online slots GGY registered a significant increase in the aforementioned period, reaching almost £3 billion in 2021/2022 in comparison to almost £1.6 billion in 2015/2016.
In-Person Gambling Remains Large Part of the Sector Despite Overall Decline in Popularity
As previously reported by Casino Guardian, the popularity of retail gambling has declined among British gamblers over time. These services, however, remain a major part of the country’s gambling industry and even show some signs of recovery following the Government’s decision to relax the Covid-19 restrictions.
According to the British Gambling Prevalence Survey 2007, horse racing and slot machines were two of the most popular gambling activities back in 2007, with participation rates of 17% and 14%, respectively. Both of them have seen proportions decline, with the percentage rates of the services being lowered by 8% and 6%, respectively.
Along with the decline registered in retail participation rates, the level of gross gaming yield also declined, with a 36% and 44% reduction in retail betting and bingo, respectively, in the period from 2015/2016 and 2021/2022. The retail gambling sector, however, remained a significant contributor to the overall GGY of the UK in 2021/2022, as it accounted for 20% of that amount, excluding the National Lottery.
Gambling Addiction and Gambling-Related Harm Trends in the UK
The gambling regulatory body in the UK noted that significant numbers of people are still facing issues with their gambling habits. Along with the fundamental changes that have taken place in the sector since the implementation of the Gambling Act 2005, there have been some changes in the gambling addiction rates, although official data shows that the headline rates for problem gambling have remained pretty much unchanged over the last few years.
The UKGC explained that measuring the precise rates of problem gambling and gambling-related harm in the country is not an easy thing to do, there has been evidence that hundreds of thousands of people are dealing with negative consequences as a result of their gambling addiction.
According to the country’s gambling watchdog, some people are more susceptible to gambling harm than others, including the ones who take part in multiple activities. Male players, high-roller players who tend to spend more money, and people suffering from mental health issues are also among the ones that are more likely to experience gambling harm.
On the other hand, while adult Brits may be in a vulnerable situation at any age, younger players may be particularly susceptible to gambling-related harm due to a combination of environmental, situational, and biological factors. The Avon Longitudinal Study of Parents and Children (ALSPAC) analysis in 2018 found that young adults were most at risk of developing gambling addiction around the age of 20 and 21, which is when they usually adjust to new freedoms and responsibilities.
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