It is no secret that the gambling industry in the United Kingdom is one of the largest, if not the largest, in the world. The gross gambling yield (GGY) in 2020 was over £14.22 billion, which is larger than the GDP of several countries, and drew the participation of over 45% of UK residents on a monthly basis.
There are several statistics to understand within those numbers, but this article will explore the astronomical growth of the online sector of the industry. We’ll explore this by looking at the reasons the industry has been so attractive to gamblers, the latest research on trends, and what the future looks like for online casinos concerning regulations.
The Expanding UK Gambling Industry Supported by Regulation
To understand how online gambling in the UK became so popular, we must first begin with the Gambling Act of 2005. This piece of legislation established the UK Gambling Commission (UKGC), which brought the beginnings of stability and trust to an industry generally believed to offer neither.
The Gambling Act of 2005 defined six types of gambling:
This allowed the UKGC to expand on regulations as the technology advanced and more residents in the UK got involved. When it comes to finance, regulation tends to add stability to the market and attract more participants.
The growing appeal of mobile betting gave way to the Gambling (Licensing and Advertising) Act of 201 4 , and between March of 2015 and March of 2016, remote gambling GGY rose 184% to eclipse that of The National Lottery and Betting. This growth is more than likely due to the government preventing gambling from becoming a crime and ensuring that gambling can be conducted at safe locations and websites with fair rules in place.
Meanwhile, regulations are in place to dissuade young people from playing casino games in brick-and mortar or online casinos. Despite the presence of a well-regulated industry, addiction is still present among UK gamblers. To decrease the growing problem of addiction, the United Kingdom implemented a ban on using credit cards to make gambling-related payments. This was enacted in April 2020 amid the growing Covid-19 Pandemic and an uptick in remote betting.
While increased restrictions can sometimes hinder growth, research from the UKGC showed that 55% of online gambling was paid for with credit cards, and the ban may have come at an opportune time since the 2020 lockdowns may have only allowed the problem to become far worse.
The State of Online Gambling in the UK in 2021
Regulation has supported the growth of online betting for several years, though the last year has brought to light wild changes in the trends of online gambling. Access to technology (i.e. mobile phones) and a recovering economy are showing a clear layout of the betting habits of UK residents and what the future may hold for online gambling.
Prior to 2014, The National Lottery held a strong lead along with betting, accounting for about 63% of the total GGY in 2013. However, the previously-mentioned explosion of remote betting after 2014 made it far easier for residents to bet online on their favourite events sports betting. Sports betting has represented a large portion of GGY in the UK since it was first allowed in 1960. Football, as the national pastime, attracts the most attention, though horse racing and dog racing also have a strong representation. All of these combined represented more than 22% of the total GGY for 2019.
The availability of mobile phones has made it easier for participants to make wagers at any time of day on several gambling websites and apps, and the interest in online casinos exploded in 2020 when the Covid-19 pandemic forced people into lockdowns. However, the lockdowns also put a stop to all sports-related betting during the 2020 lockdowns. Because of the lockdowns, there was a noticeable deviation in typical betting habits for 2020 showing an increase in GGY of £426 million for remote betting and a decrease of £859 million.
With the lockdowns now coming to an end, recent reports conducted by the UKGC are showing a general decline in total GGY between December 2020 and February 2021. Total GGY decreased 19%, with online gambling decreasing 6% and sports bets decreasing 12%. The gambling industry statistics show a drastic spike in gambling activity during the last quarter of 2020, so these decreases represent a normalization, and the trends throughout 2021 will show the next steps for the industry.
Role of Technology in Online Gambling
While mobile phones are the most popular method of placing wagers, UK gamblers are also being introduced to new ways to fund accounts and engage with online casino platforms.
While credit cards have been banned as a method for funding a gambling account, cryptocurrency is now being accepted by several online casinos as a funding method. Combined with a growing trust in the stability of the UK Gambling industry, the acceptance of cryptocurrencies is opening the doors to further growth in the coming years.
Esports have become enormously popular in the past few years, and betting on esports, particularly football, has followed. As of May 2020, eSports operators saw a GGY of £4.6 million, and some reports said that this figure had doubled by June. This sector may represent the most significant growth opportunity as it attracts a younger viewership than slots, bingo, and other types of traditional games. Not only does it attract a younger crowd but it also allows for smaller and more frequent wagers to be placed because of the number of games that are played in a typical tournament.
In addition, virtual reality platforms are being researched by developers to further engage with prospective players while offering more of an experience with online casino games in new UK casinos than anything previously available. With the ability to virtually play casino games, there are virtually limitless opportunities and could potentially allow players far more creative gaming spaces.
While the growth and stability of the UK gambling industry have attracted several exciting innovations, the ease of access and attractiveness of platforms has created a rise in the darker side of gambling: addiction.
Overview of Gambling Addiction in the UK
While the growth of the industry has opened the doors to growth in many other industries, addiction is a growing problem among UK gamblers just as in any gambling market.
The situation in 2020 only made the problem worse as people started trying to solve financial problems by gambling. The latest statistics from NHS point to a possibility that there are 1.4 million gamblers in the United Kingdom who may be considered a problem gamblers and only 3% of those manage to seek help.?
Other studies from the UKGC showed that 45.5% of males participated in at least one form of gambling. However, most of the participants are in the 55+ age group. In 2019, 52.5% of adults 55-64 years old participated in at least one form, as did 51.4% of adults aged 65+. These numbers dropped a bit in 2020, though the statistics for younger adults, those in the 35-54 range, ticked up as well.
Recent regulations also limited access to younger adults, even to free games, to help curb future problems. Advertising companies are restricted from pushing adverts to younger groups as well.
The online gambling industry in the UK continues to separate itself from the rest of the gambling types. Regulatory changes have supported this growth by building stability into platforms currently available as well as monitoring changes in platforms that are currently being developed. This stability serves to bring more willing participants to the market, especially as residents are continually released from the lockdowns of 2020.
While the trend has seen an upset due to the Covid-19 lockdowns, 2021 may see the most significant growth in online gambling due to sports and esports coming back as these are the most preferred sectors in the UK. More specifically, esports may be the market to watch for growth in 2021 as live tournaments return to attract a wider demographic of participants.