Current Status of the UK Online Gambling Industry and Some Interesting Stats

What is the current status of the UK online gambling industry today? What are the regulations currently in place and what are the proposed changes for the future? We will discuss all this and more on this page, with statistics to bolster the points raised here.

Online Gambling in the United Kingdom

Online gambling in the UK is legal and betting is available on a wide variety of games through various avenues and platforms including online casinos, online poker rooms, virtual sports books, online bingo websites and more.

Who Regulates Online Gambling in the UK?

The UKGC is the single regulatory authority for all forms of gambling in the UK. This includes the National Lottery, which is run by Camelot UK Lotteries Limited and operates with a separate license, and online gambling.

The UKGC came into existence after the passage of the Gambling Act of 2005. Its role is to regulate all forms of gambling in the UK transparently, proportionately and consistently and ensure accountability is maintained.

The different roles that this organization performs include:

• Combating illegal gambling and corruption due to betting in sports in the UK
• Publishing their interpretation of available legislation
• Supporting their compliance and enforcement actions with proper communication
• Advising government on gambling trends and possible legislation by gathering data and intelligence in these areas and also ensuring that their evidence base remains available and uncompromised
• Working with other regulators like the police and HM Revenue & Customs (HMRC)

Status of the Online Gambling Industry in the UK

The gambling industry is booming in the UK. Recent statistical data threw up a startling number – a little more than 45% of the residents of the UK gamble at least once a month, in some form or other! That statistic makes the huge numbers that the gambling industry has been dropping off – in terms of revenue – entirely believable.

Here is another bit of data that gives you an idea of how big the UK gambling industry is: the gross gaming yield (GGY) of the UK gambling industry in the period from April 2019-March 2020 was £14.2 billion, according to a report by the UKGC. Out of this staggering number, the contribution of the online segment to the GGY was a massive £5.2 billion or 39.9%.

And there’s more:

The value of the global online gambling market, according to data collected by Statista, was approximately £50 billion.

A study by Edison Investment Research further showed that Europe enjoyed a strong 54% of the market share when it came to the global online gambling market. UK’s dominance in the industry is apparent from the fact that it contributes to 15% of Europe’s total online gambling revenue.

All these statistics underscore one point – the online gambling industry in the UK is alive and breathing fire!

How Much are UK Players Betting Online?

The number of adult gamblers in the UK is around 24 million, of which about 10.5, or a little less than half, bet online. One piece of good news – players from the UK are not profligate gamblers; for the vast majority of them it is a hobby of sorts that they don’t engage in regularly or even frequently. Another way a player might accomplish this is by only playing at UK no deposit bonus casinos, free money no deposit casinos or taking advantage of free spins.

The amounts that these players bet work out to a weekly average of about £2.57 or about £133 a year. That is not a barn-buster by any standards and indicates the success of the UKGC in ensuring that its strict guidelines are enforced by all gambling operators.

What are the Games that UK Players Bet On?

The regulation of the UK online gambling industry provides players with a large collection of games, from lotteries to races to card games to slots and other games, to bet on. So what do the players bet on? What is the percentage of bets for the different games?

Here is a brief breakdown of this information:

• National Lottery: Bets on the National Lottery contribute the highest wagering percentage in the industry. 27.6% of all UK gamblers wager on the National Lottery.
• Scratch Cards: Slightly behind the National Lottery, with a healthy contribution of 11.2%, are the scratch cards. This is a hot favorite among players because it is luck-based and fast.
• Other UK Lotteries: Other lotteries besides the National Lottery combine to contribute a decent 10% of bettors.
• Sports Betting: Do you like betting on sports and games like football, hockey, boxing, MMA and tennis? Well, you may need to look around for some company because sportsbetting stands a distant fourth on the list at 6.6%.
• Horse Racing: Just behind sportsbetting is horse racing with 3.8%. The races are plentiful and the rewards are big too, which is what makes this an attractive proposition for some of the bettors.
• Slots: Slots come in just behind horse racing with a low 3.7%, defying the popular belief of slots being the most popular of all gambling games. This could be explained if you took into account that the term ‘slots’ encompasses all types of slots including land-based machines.
• Bingo: Online bingo is rapidly gaining in popularity in the UK, cashing in on the boom that the land-based bingo halls enjoyed in a not too distant past. Bingo draws 2.6% of all bettors in the UK gambling industry.
• Other Games: The generic term ‘other games’ is an almost limitless umbrella that is used to cover all those games that exist but haven’t found mention here so far. They together attract about 1.6% of the betting community in the UK.

Current Trends in the UK Online Gambling Industry: The Impact of COVID-19

COVID-19 has definitely impacted the gambling industry in the UK, both negatively as well as positively. The land-based industry was hit quite hard, while the online gambling industry actually saw a rise in the number of players and bets.

The biggest negative impact of the COVID-19 was on the land-based gambling industry, with one report stating that the industry showed an almost 50% decline in revenues because of the lockdown. The implementation of the lockdown effectively meant shutting down of casinos and gambling events like the races and lotteries. All sporting events were also suspended, which meant zero betting options.

The online gambling industry, on the other hand, showed an upward spike in numbers as players started switching to the online platform once the land-based venues started shutting down.

Websites like Bet365, for instance, saw up to 20,500,000 users trying their games online in April 2020. Other popular websites SkyBet, William Hill, Paddy Power and others too showed an upward movement in player numbers and betting.

The numbers from the UKGC showed a high number of players moving online in the first 2 months of the lockdown:

• 25% played online slots
• 38% played online poker games

Four major reasons contributed to this movement from land-based to online gambling:

• Restricted mobility
• Reduced spending opportunities
• Heightened inactivity
• Increasing desire to connect with others

Online sports betting took a hit though, with the closure of physical sports stadiums and race tracks.

Online Gambling During the Lockdown Period: Some Statistics

The easing up of the lockdown regulations saw a slightly different picture emerging in the UK. Based on data from consumers and Licensed Betting Operators (LBO), July 2020 saw a slight dip in the amount that players spent on playing slots and other online casino games. Of course, it continued to remain higher than what players spent online prior to the lockdown.

The following are some other details that emerged due to careful monitoring in this period:

• 2% decrease in the number of players playing slots for an hour or more in July 2020
• 2% rise in the number of customer-operator interactions in June and July 2020

The reinforcing of the lockdown as the UK tackled the second wave of the pandemic resulted in the numbers getting skewered again.

Data published by the UKGC showed the impact of the renewed COVID-19 lockdown measures on gambling in the UK. This data, collected from March to November 2020, takes into account online gambling as well.

Data for November 2020 showed the following trends:

• Overall growth in market activity:
  • 3% growth in active accounts
  • 4% growth in bets month-on-month
• 13% decrease in the Gross Gambling Yield (GGY) owing to normalization of real-time betting events in this month compared to October 2020
• 3% hike in the GGY of slots, to approximately £177 million
• 4% hike in the number of bets, to more than £5.2 billion
• 1% hike in the number of active accounts – a COVID-19 high of 2.8million
• 3% hike in the number of online slot sessions of over 1 hour in October 2020 and November 2020

The average session time too increased by a minute – to 22 minutes, during this period. 8% of all sessions during this time lasted more than 1 hour.

Search Trends during the COVID-19 Lockdown

Generic search trends in the UK showed that there was a marked increase in searches using the term ‘online casino’ during the early days of the lockdown.

Searches for ‘online poker’, on the other hand, was seen to spike up during the weekends as people look for online poker rooms to continue their weekend poker games, usually on Friday and Saturday.

Careful social listening –analysis of conversations and trends on social media platforms – showed that there were 1638 instances of the term ‘online + poker’ being used in the UK from 24th March to 3rd April 2020. That was a shocker because it was a 149% jump from the numbers for the same period last year.

This corresponded directly to an increase in the amount of time people stayed tuned to their devices. A market study by GWI recently indicated an 87% rise in the amount of time UK online consumers have spent being connected on devices – mostly mobile – during the lockdown.

The increased exposure to various digital media– 28% of the people spent more time on their devices exploring hobbies – translated into a good opportunity for operators to convert people who liked to gamble in person to online gamblers.

This is backed up again by the numbers – the number of consumers who spent more time on hobbies during the lockdown was 28%, which meant operators had the opportunity to convert people who preferred gambling at physical location to online gamblers.

Long-Term Impact of COVID-19 on Online Gambling in the UK

The overall impact of COVID-19 on the online gambling industry in the UK has been manageable, and to an extent even positive, so far. By the time the pandemic ends, the center of gravity of the entire gambling industry would have tilted ever so slightly but noticeably towards the digital domain.

As we can see from the information and statistics presented earlier, COVID-19 has presented the UK online gambling industry with an opportunity to expand its reach as well as bottom-line. On the flip side, though, you find a heightened level of scrutinizing and checking by the UKGC to ensure everything is on the up and up and everyone is compliant.

Let us take a brief look at these next.

Major Changes to the Gambling Act 2005 and Their Impact

The passage of the Gambling Act of 2005 was, for the longest period of time, the one big move that the government made towards legislation of gambling – offline as well as online. For the next 14 years the government seemed to have gone into snooze mode when it came to online gambling regulation.

Moves to further regulate the market began only in 2019. Over the past 2 years there have been numerous arguments and debates on what new laws, if any, should the government enact through the UKGC to regulate gambling further and make it totally safe for vulnerable players.

On 2nd February, 2021, the UKGC in a post on its website announced some new rules to further regulate gambling in the UK.

Given that slots were the games with the highest average losses per player, the new rules required 4 key features in slots to be banned outright:

• Spin speeds faster than 2.5 seconds
• Autoplay option
• Any audio or visual that makes a player feel that he has won, when what he has ‘won’ is just his stake amount or lower
• Any feature that helps speed up play or gives a player the impression that he can control the result of a specific spin

There were 2 other important changes:

• Operators are required to display the following to their players:
  • Total losses or wins
  • Total time played for in a single session
• There will be a permanent ban on reversal of withdrawals

The last point is considered critical because by reversing a withdrawal, you actually ended up spending more time and money playing the casino games by re-gambling your winnings. This in turn increased the chances of losing whatever you won and, if you were not careful enough, your bankroll.

Operators are required to implement these new rules latest by 31st October, 2021.

Here are a few other major and generic changes relating to betting and wagering that the UKGC has already announced.

Introduction of the £2 Limit at Fixed-Odds Betting Terminals (FOBTs)

The maximum bet limit at FOBTs would now be £2 instead of the £100 earlier. While this would reduce the tax that the government earned from these machines, compensation would come in the form of higher duty for online gambling.

The move came after much argument and debate for over a year but the statistics finally hit the nail on this one: figures from a report released by the UKGC in 2016 showed that 14% of players who played at FOBTs were problem gamblers.

In a single period of 10 months, there were more than 233,000 instances where players had lost more than £1000. One player apparently lost £13,779.90 in a single 7-hour period!

A direct result of this rule was betting major William Hill looking to shore up its presence in the US market because of the adverse situation on the ground in the UK – it said 900 of its UK betting shops would become unprofitable, resulting in a fall in profits by up to £100 million.

The Association of British Bookmakers too jumped into the fray, saying that the introduction of the bet limit would result in the closure of about 4000 shops and job loss to more than 21,000 employees.

Paddy Power Betfair, on the other hand had a diametrically opposite view – it welcome the government decision because it said the entire industry had ‘suffered reputational damage’ because of the FOBTs.

Spending Limits for Online Gambling

Another rule that the UKGC introduced to reduce the incidence of problem gambling in the UK was the need for casino operators to introduce spending limits for online gambling.

These limits would have to compulsorily be in place till the casino had determined – through mandatory verification checks – that the player had the financial strength to indulge in online gambling.

Displaying Responsible Gambling Messages on TV

Any advertisement on television that showcased gambling would need to display a strong responsible gaming message. The message would have to be displayed for the duration that the advertisement ran on television.

The UKGC also said that there would be a targeted and dedicated advertisement campaign on television focused on the problem of gambling addiction.

Ensure Zero Incidence of Underage Gambling

Underage gambling is a reality today in the UK with the presence of 450,000 below-age gamblers – players in the age group of 11 to 16 years – placing bets on casino games regularly. Casinos are now being asked to manually verify the age of each player.

Casinos were already being asked to request players to complete the KYC procedure and provide the required documents for verification of their identity and authentication of their account at the time of signing up, instead of the earlier practice of allowing them to do this at the time of making a withdrawal request.

The verification process is important because it ensures that a casino is not able to accept funds from a card that is not in the player’s name, thereby guaranteeing prevention of underage gambling.

Ban on Credit Card Payments

In 2020, the UKGC made it mandatory for casinos to ban credit card deposits. This decision was based on some disturbing hard information – studies showed that 22% of the British online casino community made casino payments using credit cards, leading to a high incidence of problem gambling and facing issues like gambling addiction.

New Rules to Regulate Online Gambling – Reformer’s Shopping List or Over-Regulation?

The UKGC announced a slew of rules to further regulate online gambling in the UK and make it safe for all, especially vulnerable players in February, 2021.

However, talk of these changes coming into play has been raging for a while. A report by the Social Market Foundation in August 2020 had suggested a slew of steps to regulate gambling.

These included, among others:

• A mandatory limit of £1 to £5 for online slots
• A ‘soft cap’ on net deposits on a monthly basis of £100 per month
• Game design limits for non-slot content
• Mandatory kitemarks for all licensed operators
• Tax incentives for companies that have been able to ‘establish a sufficient amount of their activities onshore’
• Replacement of the existing tripartite model; the suggestion was for the formation of a new Gambling Quartet
• Replacement of the UKGC by a Gambling Licensing Authority

The rules that the UKGC has laid down at this point are, it seems, just the beginning of a whole lot of changes; some sources actually called the whole list of recommended proposals a reformer’s shopping list. A number of the suggestions listed above would possibly become realities at some point of time in the future and be implemented.

Backing up this thought were two things:

• A post on the Twitter account of the UKGC that said Britain’s betting industry is spiraling out of control
• Cross-party consensus for a new Gambling Act

A new Gambling Act would seem like a logical step: the government has already acknowledged that the UKGC is too small an entity for the kind of industry it services and is making efforts to increase its funding and powers. Adding fuel to speculations was the announcement by the Department for Digital, Culture, Media and Sport (DCMS) of a review of the existing gambling laws of the country.

There has been immense discussion and debate about the impact and need for these new rules and changes, with strong voices emerging both for and against their implementation. Recovering addicts and a number of lawmakers – more than 50 in fact – were vociferous in their support for the implementation of the new laws.

Apprehensions have been raised, however, by industry stalwarts and bigwigs. An anonymous letter sent to the MPs of the British Parliament claimed that the changes that the UKGC was suggesting were a ‘significant invasion of personal freedom’.

Whatever you call them – reformer’s shopping list, over-regulation, or invasion of personal freedom, the new rules are here to stay. Now all we have to do is wait and watch to find out what else the UK government has in store for its voters and which way the operators will swing.