In the midst of stiff competition from iGaming and the bookies and apathy towards the sector on the part of the government, Great Britain’s land-based casino industry faces a challenging 2018.
As 2018 gets underway, Great Britain’s 146 casinos are facing challenges on a number of fronts, amid intense competition from both iGaming and the high street bookmakers, and regulatory indifference from the government.
At the end of last October, the government released the findings from its latest consultation on gambling regulation, but the outcome was disappointing for the country’s gambling sector, casino operators included.
The Department for Digital, Culture, Media and Sport’s Consultation on proposals for changes to Gaming Machines and Social Responsibility Measures saw scant progress on a number of key issues facing British operators, including the cap on machine numbers; contactless payments; increasing the prize value of Progressive Linked Jackpots; and allowing casinos to offer customers access to online products via dedicated tablets.
“Essentially the primary issue is that of competition, with other sectors operating in a relatively regulation free environment,” explained Paul Sculpher, operations director for GGV Developments.
The competition, he believes, needs attention.
“Online casinos can offer unlimited slot options with commensurate stakes and prizes, and the continuing availability of 30,000 plus FOBTs on the high streets is a form of gambling which is wildly out of kilter with the level of support and management provided in that environment.”
Figures from the Gambling Commission show that remote gaming – largely online – now accounts for a third of the UK market and is the largest sector by gross gambling yield (GGY).
Within this, remote casino has the biggest share, comprising 55.5 percent of the market, while online casino games generated £2.6bn in GGY, predominantly lead by online slots.
Given this, it would seem inevitable that there would be cannibalisation, as players who previously would have gone to a land-based casino, opt to play on their devices instead.
“I think that the new millennials are going to be the first generational cohort that are not enamoured by land based gaming,” stated Steve Donoughue, CEO of GamblingConsultant.co.uk.
“Those who remain fans of casino games now have the ability to sit at home and play.
“Considering how quickly technology moves forward, their experience will only continue to improve, think virtual reality and personalised hosts. The land based product will always be behind because of regulation and CapEx costs.
“All it can do is focus on the social experience to differentiate itself and that is not always simple with casinos.”
Faced with this, what can British casinos do to diversify themselves? With further growth in the British tourism sector in 2017, and with Chinese tourists – a core casino demographic – splashing out £29m across the UK during Golden Week in October, developing casino tourism has been proposed as one solution.
Sculpher suggests that while incorporating non-gaming options may improve visibility, it also has its limits in terms of commercial viability.
“The blending of casino gaming with a night out is valid, but has its limits, in terms of the commerciality of catering to 2000 people on a Saturday night who have no intention of risking more than an average of £5 per head on gaming,” he continued.
“That said, they’re still a growth area, no matter how slowly they move up the gaming curve.
“I have a suspicion that part of the future for casinos in the UK is more centrally located smaller casinos – for all the aspiration to open up the industry to a new cohort of players, with an integrated site encompassing a comprehensive food and beverage offer, poker, gaming and entertainment, operators are also mindful that it’s an 80/20 business – 80 percent of revenue coming from 20 percent of visitors.”
A tough task for the UK casino sector, but it’s one that the industry is certainly equipped for. The coming months will see some strong lobbying of the government to open the door slightly and enable the sector to maximise commercial opportunities.
After all, tourism is the great post-Brexit hope and UK casinos have a leading role to play here.