The Future of Online Gambling: Will It Suffer The Fate of The High Street?
With the recent news that William Hill will close 700 stores across the UK, many people are wondering about the future of online gambling. Will it suffer the same fate? In this article, we’re going to explore how the online gambling industry is changing.
What’s Happening to the Bricks and Mortar Gambling Shops?
Before we look at the online gambling market, let’s explore the two main trends affecting the bricks and mortar gambling shops:
1. Fewer people in the high street: the number of people visiting the bricks and mortar betting shops and casinos has dropped significantly. The industry is suffering the same fate as many high street shops. Businesses such as William Hill understand this, and they are starting to focus their efforts online.
2. Stricter rules and regulations: the government is cracking down on problem gambling and this is affecting revenue for the high-street betting shops. Rules restricting play on Fixed Odds Betting Terminals (FOBTs) means punters spend less money. Less revenue for the betting shops means they’re becoming increasingly unviable.
How do these trends affect online gambling? Do they have any impact on the future of online gambling?
Let’s have a look.
How Changes to Bricks & Mortar Gambling Is Rippling Through Online Gambling
The Good News (For Online Gambling)
Convenience is a huge driving factor behind online gambling. Despite the closure of the high-street gambling shops, the online gambling industry is flourishing.
As of 2018, online gambling now holds 39% of the total value of the industry. This is an increase of 1.2% last year. The overall impact of closures in the high-street is a growth in online gambling.
There is a twist here: bricks and mortar shops have a social element that some people may feel they’re missing by moving online. This is probably partially responsible for the huge increase in recent years of the introduction of social elements to online gambling.
For example, in recent years, we’ve seen the rise of both live table gambling and virtual gambling. This has brought about a more connected online industry, where people can have conversations and otherwise engage with each other…if they want.
The Bad News (For Online Gambling)
However, some of the issues affecting the real-world gambling industry are also affecting the world of online gambling.
For instance, the introduction of ‘Maximum Stake Reduction’ from £100 to £2 affects both online and real-world casinos. In terms of the future of online gambling, this will affect the amount of revenue generated.
We expect to see the industry shrink in the UK as these rules come into effect and start to make an impact.
A problem with a smaller industry is less tax. In line with ‘Maximum Stake Reduction’, the government is likely to increase taxes on the gambling industry to make up for the shortfall.
In other words, online casinos that cater to the UK market will see their profits fall in two ways. First, the punters will spend less money. Second, the gambling operators will have to pay more tax on any profits they generate.
More Good News (For Online Gambling)
Despite these changes, the online gambling industry is continuing to grow. The European Gaming & Betting Association expects the industry to grow from €19.6 billion in 2017 to €24.7 billion by 2020.
The online gambling industry appears to be capitalising on the losses from the high street betting shops. Punters are moving online.
The legislation that has been particularly crippling for the high street is affecting online gambling, but a general growth in the market is offsetting the damage.
In 2019, the future of online gambling is safe. Safe for the industry, but safer for gamblers too as legislation protects against the risk of heavy financial losses.
It’s a win-win.