The gaming industry is affected by many forces; the implementation of new legislation, advancements in technology and the rise of online spending, to name a few.
The year 2019 brought about a few shocks, as the UK reacted to and dealt with social problems arising from certain aspects of gaming, namely fixed-odds terminals. In general, it was business as usual, especially for the online gaming sector, which continues to grow year-on-year, propping up the growth of the industry as a whole.
Industry Growth
According to IBIS World, UK gaming revenue in 2019 is expected to reach £15 billion. This includes all segments of the industry, from casinos and bookmakers, to online sites and lotteries.
Despite this, there was a fall in the number of business operators – down to 11,468 – and subsequently less employment in the industry. However, the annual growth rate during 2014 – 2019 was 6.9%. This could be due to changes in legislation, mentioned in further detail later in the article, but could also be due to a general trend towards online spending.
Much of the growth of the UK gaming industry is due to the popularity and accessibility of online gaming.
Online Gaming Key To Growth                                         Though estimates vary, most sources estimate that online gaming represents between 30 – 40% of the real money gaming and wagering industry, likely around one-third of the total revenue. This makes the online sector the fastest growing in the industry.
Fuelled by the popularity of online games, operators have been quick to expand their offerings to appeal to a wider audience. Players can find increasing numbers of pop-culture slots, unique poker variations and entertaining online casino games.
Even blackjack, which dates back to the 1600s and has traditionally had simple rules, has had a facelift. Nowadays there are online creations for those who want to explore a bit deeper, giving players the choice of traditional or new versions of blackjack, or new games like Deal Or No Deal blackjack.
Online operators have been quick to capitalise on the popularity of online casino games, but the growth of online gaming is actually part of a more general trend towards online expenditure. More people are spending money online, as opposed to in physical stores and locations. This trend is set to carry on and should continue to benefit the gaming industry.
UK Legislation Changes
2019 has also seen several important legislation changes in the UK, which affect the industry, gaming operators and, in some respects, the players too.
The main change was initially announced in May 2018. Fixed-odds betting terminals (FOBT), which includes slots and roulette machines, could no longer have a maximum bet of £100. This was reduced to £2.
The original announcement caused a stir. The intention was to protect players, but obviously there were those in the industry who weren’t happy with the losses that would be incurred. Major bookmakers have stated that they will shut hundreds of shops as a result of the change.
Indeed, the move would even cost the state an estimated £100 million a year in revenue. A delay was proposed to give businesses more chances to respond, but after further public outrage, all businesses had to adhere by April 2019.
To counter the loss from FOBT maximum bet reductions, the UKGC decided to increase the point-of-consumption tax from 15% – 21% in a bid to recover some money. Though this may have worked, it also puts a strain on businesses, some of which were forced to close and others which expanded to foreign markets.
Expectations For 2020
Expectations for 2020 are not exactly revolutionary. The gaming industry should continue to grow at a rate of around 4 – 6%. Sudden changes in legislation could shake the industry, but in general growth should be supported by the online market, which still hasn’t peaked.
Technology is always a huge driving force behind the casino and online gaming industry, so it will be interesting to see what tech trends will dominate the iGaming conferences in the coming year.
More players are choosing to game online and an increasing number are accessing online gaming via mobile devices.
As the online market becomes increasingly saturated (which it has done over recent years), expect to see unique branding and positioning by operators who are looking to find their space in the field.
