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Betting and Gaming - Market Report

Betting and Gaming - Market Report

Report price : $ 828
Publication date : October 2008

Betting and Gaming - Market Report

The betting and gaming industry of Great Britain has a substantial turnover. In 2007, net expenditure on games of chance, including the National Lottery, increased by 2.1% on the previous year. The industry has been in the process of significant change following deregulatory measures — a result of the 2005 Gambling Act, which came into effect in September 2007.

Another significant trend is consolidation; the most extreme instance of which was seen in the pools sector where Sportech PLC's acquisition of Vernons in December 2007 meant that the former now controls all three major football pools brands in the UK. Sportech now represents approximately 99% of the total football pools market with a customer base of over 700,000 weekly players. In the casino sector, Harrah's Entertainment is understood to have made a tentative approach to Gala Coral Group about a possible merger between Gala Casinos and its own London Clubs International business. Meanwhile, Genting International — the Malaysian gaming company that owns Stanley Casinos — has announced that it has lifted its stake in the Rank Group, sparking fresh bid speculation. Therefore, more consolidation looks increasingly likely in the near future.

Conversely, the survival of the bingo sector looks in jeopardy. The industry continues its battle to change the existing tax system, which treats the sector unfairly in comparison with other betting and gaming activities, while it has been particularly affected by the smoking ban that came into effect in 2007. The ban has had limited effect on betting shops, for example, as punters do not usually need to spend any length of time inside the establishment. However, smokers who are forced to leave bingo clubs to indulge their habit are losing valuable playing time.

It may have been a difficult year for the industry with new legislation, a tougher tax regime introduced by the 2007 Budget, and the reduction in the number of permissible high jackpot machines. Nevertheless, on the whole, betting and gaming is an activity that is much more recession-proof than others. In fact, rising household bills, a faltering housing market and the credit crunch may make betting and gaming even more appealing to some punters. The Government may have backtracked on plans for the UK's first supercasino, but there are plans to build many more casinos of a smaller size. Another area of betting and gaming expected to enjoy considerable growth is online gambling. Recent developments in this sector include the fact that operators of remote gambling based in Great Britain came under the jurisdiction of the Gambling Commission in September 2007, by virtue of the 2005 Gambling Act. They are now required to produce quarterly statistical returns, so that the size of the industry will become more quantifiable.

Executive Summary

1. Market Definition

MARKET SECTORS

MArket TRENDS

Incidence of Gambling

Remote Gambling

Economic trends

Population

Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007

Gross Domestic Product

Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2003-2007

Inflation

Table 3: UK Rate of Inflation (%), 2003-2007

Unemployment

Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007

Household Disposable Income

Table 5: UK Household Disposable Income Per Capita (£), 2003-2007

MARKET POSITION

The UK

Table 6: Expenditure on Games of Chance as a Proportion of Total Consumer Expenditure on Recreational and Cultural Services (£m and %), 2003-2007

Overseas

2. Market Size

The total Market

Table 7: Net Expenditure on Games of Chance at Current Prices (£m), 2003-2007

Figure 1: Net Expenditure on Games of Chance at Current Prices (£m), 2003-2007

By MARKET SECTOR

Lotteries

The National Lottery

Table 8: Amount Staked on the National Lottery (£m), Years Ending 31st March 2004-2008

Other Lotteries

Casinos

Table 9: Casino Drop and House Win in Great Britain (£m and %), Years Ending 31st March 2007 and 2008

Bingo

Table 10: Amounts Staked at Bingo Clubs (£m), Years Ending 31st March 2004-2008

Football Pools

Table 11: Total Stakes on Football Pools (£m and %), Years Ending 31st July 2003-2007

Bookmaking

Betting and Gaming Duties

Duties from Betting and Gaming Paid to the Government

Table 12: Receipts from Betting, Gaming and Lottery Duties (£m), Financial Years 2005-2008

The 2008 Budget

Remote Gambling

3. Industry Background

Recent History

Number of Companies

Table 13: Analysis of UK VAT-Based Enterprises Engaged in Gambling and Betting Activities by Turnover Sizeband (number and %), 2007

Employment

Table 14: Analysis of UK VAT-Based Enterprises Engaged in Gambling and Betting Activities by Employment Sizeband (number and %), 2007

Regional Variations in the Marketplace

DISTRIBUTION

The National Lottery

Casinos

Licensed Bingo

HOW ROBUST IS THE MARKET?

Control of the Industry

Lotteries

LEGISLATION

General Legislation

The Gambling Act 2005

Legislation of Relevance to Lotteries

The National Lottery Act

TRADE ASSOCIATIONS

Association of British Bookmakers

Bingo Association

British Amusement Catering Trades Association

The British Casino Association

Business in Sport and Leisure

Gaming Regulators European Forum

Interactive Gaming Council

National Association of Bookmakers

Pools Promoters Association

Racecourse Association

Remote Gambling Association

4. Competitor Analysis

THE MARKETPLACE

Lottery Operators

Casinos

Licensed Bingo

Gaming Machines

Football Pools

Table 15: Total Stakes Received by Littlewoods, Vernons and Zetters Football Pools (£m), Years Ending 31st July 2003-2007

Bookmaking

MARKET LEADERS

Camelot Group PLC

Company Structure