iGaming growth drives 4.2% increase in UK gaming yield

5 December 2018

The UK online gaming industry has seen total gross gaming yield (GGY) for the 12 months ended March 31 climb to £5.3bn (€6bn/$6.8bn), with the sector now accounting for 37% of the market total.

Total market yield rose 4.2% year-on-year to £14.4bn, according to the UK Gambling Commission’s figures, with a 12.8% increase from remote gaming, comprising betting, bingo and casino, offset by slower growth or decline in all other regulated verticals.

Of the total £5.3bn online GGY, the vast majority was generated from casino and sports betting. Casino accounted for £2.9bn (54.6%) of the total, followed by betting, with a £2.1bn (38.7%) share. The remaining 6.6% came from bingo (£164.8m or 3.1%), exchange betting (£160.1m or 3%) and pool betting (£28.7m or 0.5%).

Online casino GGY was comprised largely of slots, which generated £2bn (69.1%) of the total, followed by table games in a distant second place with yield of £311.1m.

In sports betting, football accounted for £1bn of total yield, followed by £610m from betting on horse racing.

Over the reporting period, active customer account numbers across all licensed operators grew 12.9% to 33.6m, with new account registrations up 14.4% to 35.4m. This looks set to grow further in the figures for the year ended September 30, 2018, which are due to be released in February 2019.

The second largest single vertical was land-based betting, which saw GGY decline 4.1% to £3.3bn. The bulk of the total came from off-course betting facilities, which accounted for £3.1bn, followed by £146.5m from non-remote pool betting, and £25.8m from on-course wagering.

However, GGY for off-course betting is likely to decline significantly from April 2019, as a result of maximum fixed odds betting terminal (FOBT) - or B2 machine - stakes being cut to £2. Gaming machines accounted for £1.8bn of shop GGY, with B2 machines generating 96.1% of this total.

Over-the-counter wagering accounted for £1.3bn, or 42.1% of total non-remote betting GGY.

Shop numbers declined 1.8% over the year to 8,406, with this number again expected to fall as a result of the FOBT stake cut. William Hill-branded shops account for 27.1% of all UK betting shops, followed by Ladbrokes premises at 22%. With a 19.6% share Betfred comes in third, followed by Gala Coral - like Ladbrokes, part of GVC Group - with 18.3% of all UK premises.

The National Lottery was the UK’s third-largest source of GGY, posting a marginal rise to £3bn for the 12-month period. The lottery paid out £3.9bn in prizes, down 0.4% year-on-year, with its contribution to good causes rising 1.5% to £1.5bn.

It was followed by bricks-and-mortar casinos, which saw GGY rise 2.4% to £1.2bn. There were 152 casinos throughout England, Scotland and Wales, with Rank Group and Genting UK dominating the market, operating 72% of all venues.

American roulette was the most popular game, with a 34.7% share of GGY, followed by baccarat variant Punto Banco with a 24.9% share, then electronic gaming (17.4%).

The remaining regulated verticals lagged far behind the four largest verticals. Land-based bingo reported a 0.2% increase in GGY to £688.3m, while lotteries, including online and land-based offerings, saw yield rise to 13.7% to £502.9m. The arcade sector was the only to post a decline in yield, which fell 0.9% to £418m.

The regulator also published figures on social responsibility controls, which revealed that 1.4 million customers self-excluded from gambling during the reporting period. A total of 121,163 customers breached their self-exclusion by gambling in some form, while 78,005 opted to resume playing after their exclusion ended.

Over the 12 months, 247,243 individuals unable to prove their age were challenged when trying to enter gambling premises, with the majority of these instances taking place in betting shops or arcades. Just 78 individuals were challenged when attempting to enter a casino.

A further 88,971 individuals gambled without being able to verify their age. Online accounted for 72,033 of these incidents.