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Ukgc analysis: iGaming gaining footprint; retail down but still “a significant part” of the sector – Yogonet International
Ukgc analysis: iGaming gaining footprint; retail down but still “a significant part” of the sector ” />
The Uk Gambling Commission has shared a new article in which the regulator reflects on the shape and size of the Gambling Industry in Great Britain, including the impact of macro trends and the Covid-19 pandemic on gambling behaviors. The Ukgc said that while the overall number of people gambling, and the associated Gross Gambling Yield (GGY), had been relatively static up until the start of the pandemic in 2020, this scenario has changed since then, with online gaming gaining footprint as the retail sector seeks to adapt to this new context.
Headline level participation for products under the Gambling Act 2005 had been stable at around 32% of the adult population between 2017 and 2019. “It was clear that gambling, with the exception of bingo, was more popular amongst men than women, as it was when the Gambling Act 2005 was introduced,” the regulator noted. The age group most likely to participate in gambling was the 25 to 34 year old group.
However, during the pandemic, GGY relating to products under the Gambling Act 2005 fell by around 16% for the year to March 2021. The pandemic also made the difference between the number of men and women gambling much smaller – female gambling participation maintained its level while male participation dropped. In 2021, the Ukgc saw that certain activities were more popular amongst females than males including society lotteries, scratchcards, fruit and slot machines in arcades and the National Lottery instant win games. The rate of gambling by the 25 to 34 year old group decreased significantly to levels seen amongst other age groups.
Since Covid-19 restrictions were lifted in 2021, with products and opportunities to gamble available to consumers again, the overall percentage of the adult population who gamble remains lower than it was pre-Covid-19, at 28%. However, there are signs of a return to gambling amongst younger age groups aged 16 to 24 and amongst males gambling in retail, The Gambling Commission noted. Industry GGY in 2021-22 for products under the Gambling Act 2005 is just 2% below what it was pre-pandemic (2019-20).
The move towards iGaming
The shift to online is described by the Ukgc as “a gradual and consistent trend” which continued through the pandemic – however, “spend appears to have increased more quickly than the increase in consumers.”
In September 2022, data from The Gambling Commission‘s quarterly telephone survey saw the proportion of adults gambling online (18%) equal to the proportion of people gambling in person (18%) – whereas five years before, in-person rates were approximately double online participation rates. Despite the increase, the iGaming participation rate has not yet reached the level of in-person participation before the pandemic, which was 24.4% in 2019.
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The pandemic period saw a shift from retail to online play for the National Lottery. “But for products under the Gambling Act 2005, the trend of a long-term gradual increase in online participation, rather than a spike, continued,” says the Ukgc. The increase seen during the period was also driven mainly by women rather than men – from 13.2% in September 2019 to 17.2% in September 2022; while male participation has been static for the last four years.
Likewise, there has been an increase in the share of GGY generated from Online Gambling – from 42% of GGY in 2015-16 compared to 61% in 2021-22 (excluding the National Lottery). In terms of product, there has been significant growth in the GGY generated by Online Slots over the same period from nearly £1.6 billion in 2015-16 to nearly £3.0 billion in 2021-22. “The rate of increase in spend has always been higher than that of participation,” the regulator noted.
The popularity of retail gambling
Whilst the popularity of gambling in person has declined over time, it remains “a significant part of the sector” and is showing signs of recovery following the pandemic. Along with the decline in retail participation, the level of GGY has also decreased – retail betting and bingo saw decreases in GGY of 36% and 44% respectively between 2015-16 and 2021-22. However, retail is still a significant contributor to the level of gambling activity, and retail betting on its own accounted for 20% of the total GGY in 2021-22 (excluding the National Lottery).
Additionally, while there were concerns from the industry that the pandemic would have a significant negative impact on the retail landscape, in-person participation in gambling has increased in September 2022 compared to September 2021, particularly amongst males and younger adults up to the age of 24 years old.
Problem gambling and gambling harms
Whilst the precise measurement of problem gambling and harms is complex, the Ukgc says that “significant numbers” of people continue to encounter issues with their gambling, with “hundreds of thousands of gamblers” suffering negative consequences from their gaming. However, while the gambling landscape has changed fundamentally since the Gambling Act 2005, the headline rates for problem gambling have been static in recent years.
Within those numbers, some people are more likely to experience harm than others, including those who engage in multiple activities, men, those with probable mental health issues and players with the highest gambling expenditure. “Whilst adults may be in a vulnerable situation at any age, young adults may, in particular, be additionally vulnerable to gambling-related harms due to a combination of biological, situational and environmental factors,” the regulator noted.
In a 2018 analysis of the Avon Longitudinal Study of Parents and Children (ALSPAC), young adults were found to be most at risk of falling into problem gambling around the age of 20 to 21. The study found this is a time when many young adults are adjusting to new freedoms such as moving out of home and managing their own finances. The Ukgc has also recently shared an individual report on problem gambling among young people, which Yogonet reported on earlier this month.
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