UKGC Market Analysis: Retail Down, iGaming Gaining

UKGC Market Analysis: Retail Down, iGaming Gaining

Post-pandemic landscape: The UKGC shares an analysis of the gambling market and the effects of larger trends on gambling participation and behaviour.

The UK Gambling Commission (UKGC) has released a new document detailing its reflections on the size and shape of the UK gambling industry in 2022. The report includes an analysis of the impact of macro trends and the pandemic on gambling behaviours.

Overall, until 2020 the gambling industry was relatively static. Still, as the pandemic took hold, iGaming began to get a more significant foothold in the market, with retail dropping and now reacting to the changing market.

UKGC Main Findings

  • Gambling participation across all products was stable at around 32% of the UK adult population between 2017-19. Gambling in all categories was more prevalent with men, except for bingo. Gambling was most popular with 25-34-year-old males.
  • However, in 2021 gross gambling yield (GGY) reduced by 16% for the year to March.
  • Gambling participation in men dropped. The female participation rate remained stable. Overall this closed the gap between male and female gambling participation rates.
  • The lottery, instant win, scratchcards and slots became more popular with female gamblers in 2021.
  • The 25-34s gambling rate dropped significantly to match other age groups.
  • The gambling participation rate is still lower in 2021, at 28% of the adult population than at pre-pandemic levels.
  • For total revenue, the 2021-22 GGY was 2% lower than pre-pandemic figures for 2019-20.

A Shift Towards iGaming

The Gambling Commission has called the shift towards iGaming a “gradual and consistent trend”. However, while the move to iGaming continued throughout the pandemic in line with retail closures, the spend per player seems to have increased more quickly than the number of consumers.

The September 2022 quarterly telephone gambling participation survey data results show that 18% of adult gamblers do so online. Meanwhile, 18% opt for retail. Five years previously, the number of retail gamblers was double that of online, so redistribution has taken place between the two channels. Despite the changing medium of play, iGaming rates have not reached the same level as seen by retail gambling before COVID-19.

Online lottery ticket sales saw continued growth in sales across the pandemic period, showing a “long-term gradual increase..rather than a spike”. The increase was created by more female gamblers buying online tickets (figures increased from 13.2% in 2019 to 17.2% in 2022.

Similarly, the share of total GGY contributed from iGaming increased, particularly slots. Online gaming created 42% of GGY in 2015-16, and in 2021-22, it was 61%. The Commission noted that, for the main part, this was due to an increased spend per player rather than more consumers.

What About Retail?

The popularity of retail gambling has been slowly declining over time. However, it remains a vital cornerstone of the industry, with retail betting alone contributing 20% of GGY in 2021-22. According to the UKGC, it is showing signs of recovery post-pandemic; however, comparing 2021-22 with 2015-16’s figures, it’s still fallen by 36%. Retail gambling figures are recovering, with adults up to 24 attending and betting in person.

Problem Gaming and Harms

Over the last decade, rates of problem gambling in the UK have remained low, with the latest figures showing a 0.2% rate of problem gambling in the UK. However, 0.2% still equates to an unsuitable figure in real terms. While the UKGC continually updates guidance for operators, the last legal update from governments was in 2005; this is currently being addressed with the Gambling Review Act, which is well underway and will include specific responsible gambling measures, including player affordability checks.

The UK has identified that males, particularly younger males, are more at risk of problem gambling, stating, “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.”

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