While there are many industries that have been struggling in the current economic climate, gambling is not one of them. Results for Q4 of the 2023/24 financial year showed a gross gambling yield (GGY) of £1.36bn. With stricter regulation on its way, can the industry maintain this level?
For the past five years, the UK Gambling Commission (UKGC) has released quarterly figures for the industry. These latest ones cover the period from the start of 2024 to March 31. When comparing the results with those from the same period in 2023, there is a 5% increase. The £1.36bn GGY figure is also higher than that which was recorded in Q3 of the 2023/24 financial year.
Will it continue to be an upward spiral for GGY? There are many areas that contribute to these figures including betting on sport and playing casino games. One of the key contributors to the latest increased amount of revenue is the playing of online slot games.
GGY for Q4 was £614 million as players did their best to trigger bonus games, get winning combinations and win big cash prizes. That figure was 11% higher than recorded in the same period last year.
March was a hugely successful month with the total yield being £220.4 million for online slot games. Although the UK online casinos as per agamble.com will be delighted with such figures, it gives more fuel to those who see online slots as one of the main reasons why players suffer gambling harm.
Critics are wary of the addictive nature of these games and how players can lose large amounts of money in a short period of time. There is currently no maximum stake limit for such games but that is due to change in the future.
As part of their promise to reform the 2005 Gambling Act, the Conservative government announced recently that maximum stake limits will be put into place from September. For those aged between 18 and 24, the limit will be £2 per spin of the reels. If aged 25 and over, the maximum stake limit will be £5.
There has been criticism of the announcement with some believing the £2 limit should be put into place for all age groups, not just those aged under 25.
What may have thrown a spanner into the works though is the announcement of a General Election on July 4. Current polls indicate that Labour will be in Downing Street soon due to their large lead in the opinion polls. The worry the UK gambling industry will have is what would a Labour victory mean for them and the new stake limits? While a win for the Conservatives is currency looking unlikely, at least the gambling industry has a fair idea of what lies ahead for them in the future if they are re-elected.
In the past, there was concern over the gambling machines that were introduced into UK High Street bookmakers. Players were placing up to £100 on those machines and incurring huge losses.
A maximum stake limit of just £2 was introduced and this hit the finances of UK gambling companies. So much in fact that some shops were closed and staff redundancies took place. The concern is that the new online slot stake limits will have a similar effect on GGY.
Further measures are also expected in the future. These include stricter affordability checks to see if gamblers can afford the amounts being staked. Spin speeds for online slots are expected to be reduced and autoplays (paying for a number of games in one go) banned.
Land-based betting operators didn’t report such impressive figures as online sites. Q4 showed a 3% fall for licensed companies with the GGY being £568m, well below that achieved by the online betting sites.
Stricter regulation is on the way regardless of the result of the General Election. What worries gambling companies is how their customers will react to this happening. There have already been worrying comments made that indicate the new measures may well see many players leaving the regulated market.
That would be bad news for those that are licensed and regulated by the UK Gambling Commission. Non-regulated sites on the black market offer considerably less customer protection. It could well be a case of out of the frying pan and into the fire.
The current figures are promising ones, especially for the online sector of the UK gambling industry. However, the future may well be an uncertain one and a close eye will be kept on the upcoming manifestos published by parties during this General Election campaign.