UK Mobile Gambling: A dot on the Horizon or Real Change?

The UK has been one of the strongest markets for gambling companies for some time. While they may not have the proliferation of casinos that the US has, there are more betting shops than you can shake a stick at. Yet mobile casinos continue to grow.

So where is the UK market going? As bookmakers go online and mobile, millions are spent on high profile TV ads containing major celebrities like Ray Winstone and Chris Kamara (OK, maybe not major celebrities), and land-based casinos continue to employ weird and wonderful strategies to attract punters, where will the average UK gambler spend his hard earned cash?

The UK Provides some of the world’s best known betting brands

• William Hill was founded in 1934, and runs a series of sportsbooks in Nevada
• Ladbrokes was founded in 1886, and is the largest retail bookmaker in the world
• Founded in 2000, Bet365 offers its services in over 200 countries
• BetVictor was founded in 1946 as Victor Chandler and turns over more than GBP1b

Apple’s release of the iPhone did more than just part happy consumers with their cash, it heralded in a new era for gaming. More than just gaming, though, it set the cogs in motion for the mobile casino revolution that has gripped the UK and Europe in general.

At recent mobile casino awards, UK companies such as Jack Gold Mobile Casino have taken to the stage, showing off their new, integrated products by winning awards.

Yet, despite their record profits and revenue growth, mobile casinos still lag behind the UK’s traditional gambling powerhouses. Indeed, online and mobile casinos – together – gained a measly 5% of the online gross gambling yield, and that’s before you factor in land-based operators.

In-Play or In Shop?

Mobile gambling isn’t just restricted to casinos, though, far from it. Instead, the biggest area of growth has been in mobile betting apps, and the major players have been pulling out all the stops to win over a young crowd.

With adverts featuring major and minor celebrities, transvestites abseiling on skyscrapers, and voice-overs from famous funny-men, companies such as BetVictor, Ladbrokes, Bet365 and Paddy Power are battling hard for your wallet.

One of their big selling points is a feature called “in play” that allows you to cash out your bet at a lower rate while the match is still going on. Yet even this isn’t winning over the British bookmaker’s key crowd, as the humble betting shop still rakes in by far the highest percentage of gross gambling yield.

The Rise of the Problematic FOBT

Interestingly, though, this figure – 51% or GBP3.19b – however incredible, was made possible not by thousands of punters handing in neatly, or not so neatly, betting slips, but by gamblers spending hundreds of pounds on machines known as Fixed Odds Betting Terminals.

These FOBTs raised a staggering GBP1.55b, up 45% from 5 years ago. These machines have come in for a lot of criticism due to their massive GBP100 maximum wagers in particular.

So it actually turns out that a healthy chunk of bet shops’ take is actually down to something not unlike a slot machine. Perhaps mobile casinos have a chance to overtake betting in the near future after all.

Well, that depends on any law changes, however.

Point of Consumption

There are likely to be law changes, too, with many calls for FOBTs to either be banned or have their maximum wager significantly reduced. That’s not at the top of UK gambling’s priority list, however, as the new Point of Consumption (PoC) tax has stolen away top billing.

In order to stop companies basing themselves in jurisdictions such as Gibraltar and the Isle of Man to avoid paying UK tax, the government came up with PoC. This new tax means that any gambling company offering UK based services has to pay an amount – looking likely to be 15% – based on their earnings in the country.

While William Hill have threatened legal action, most companies are willing to accept this development, probably due to the GBP6.3b pie on offer in the UK’s busy gambling market.

Changing Demographics or More of the Same?

One thing that’s sure is the average age of the UK gambler is coming down, albeit only slightly. Land-based bettors have a reputation for being older men, and this stereotype has been compounded by the invention of mobile betting.

With more and more of the young population betting on their mobile devices – and taking advantage of services such as in-play betting – mobile could well be about to seriously take off in the UK at any point.

At least UK mobile gamblers will find a highly developed range of products once they do go mobile.