Online Betting and Gaming Dominate UK’s Gambling Industry

The UK gambling industry generated record gross gambling yield of £13.8 billion in the period between October 2015-September 2016, the latest figures posted by the UK Gambling Commission show.

The amount of £13.4 billion was generated during the previous (April 2015-March 2016) reporting period.

Online gambling was the largest sector in the country for a second consecutive reporting period. Gross gambling yield from iGaming and sports betting services totaled £4.5 billion during the reviewed twelve months, up from £4.2 billion in April 2015-March 2016.

The provision of remote gambling services was regulated in the UK back in 2005 with the introduction of the Gambling Act 2005. Online gambling had its ups and downs over the next several years, but it can be said that it grew at stable pace. The original 2005 gambling law was amended in 2014 in a manner that required all operators providing their services to UK players to obtain a license from the UK Gambling Commission.

In addition, the 15% Point of Consumption tax was introduced, making it compulsory for all UK-facing operators, no matter where they were headquartered, to pay a 15% share of their GGY. As a result from the 2014 amendments, gross gambling yield from iGaming increased exponentially in the country from £1.1 billion in the April 2013-March 2014 reporting period to £4.5 billion during the latest reviewed twelve-month period. UK’s remote casino, betting, and bingo sector accounted for 32% of the whole market in October 2015-September 2016.

In terms of land-based gambling, B2 gambling machines, or fixed-odds betting terminals, remained a particularly large contributor to the country’s gambling industry. Gross gambling yield from these amounted to £1.8 billion in the period between October 2015-September 2016. There was an average of 34,388 machines in betting shops across the country during the reported twelve months. According to UKGC’s report, there were a total of 8,788 betting shops in the UK by the end of March 2017.

FOBTs have been mentioned in media publications and industry reports on multiple occasions over the past several years, particularly over the past year. A triennial gambling review by the UK Government is dedicated to the betting machines and their controversial nature and is expected to bring certain changes in the way these are regulated. Anti-gambling campaigners have requested a reduction of the maximum FOBT stake from £100 to just £2 and it is yet to be seen whether such a massive reduction will be implemented.

The highly demonized machines represent an important part of major UK bookmakers’ retail businesses and any unfavorable regulatory changes could hit their profitability significantly. The results from the review are expected to be released after UK’s June 8 general election.

Sports betting generated gross gambling yield of £1.6 billion in the twelve months to September 2016. GGY from casino operations – both table games and gaming machines – totaled £1.2 billion. Bingo generated a total of £682.3 million during the period in review. The Gambling Commission’s full financial report for the October 2015-September 2016 period can be read here.

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