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Gambling Review - UK - December 2011

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

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