The Gambling Industry, a Tale of Two Halves
The Gambling Industry, a Tale of Two Halves
The economic recession commonly known as the credit crunch is having a different effect on the gambling industries two segments.
On the one side the traditional bricks and mortar business of casinos and betting shops with a few country exceptions is suffering whereas the new vibrant Internet gambling business is achieving solid results amidst growing uncertainty.
In the US Gaming revenues in Nevada fell 10.4 percent in 2009, the largest single-year decline in state history.
In the UK Ladbrokes reported operating profits down 32%
In the UK casinos are recovering from a hike in gambling taxes and the smoking ban which reduced revenue by 15% at its peak.
People have undoubtedly become more cautious with the fear of losing their jobs and those that have lost their job are staying at home and have more leisure time. People have to be amused and gambling provides an instant thrill unsurpassed by most leisure pursuits.
The online companies are telling us that while stakes have fallen the rapidity of play has risen which means that people have adjusted their spending pattern to meet their new circumstances. They want fun but they are prepared to bet within their means, entirely rational behaviour.
Internet continues to provide exceptional value for money; the customer regularly receives a bonus payment to start play and a much higher average payout than his off line counterpart.
By contrast a visit to a casino means getting the car out of the garage, using expensive petrol to drive to the destination, and when there buying food and beverage. It’s much cheaper to gamble home!
We must not forget that this is a global business, as well as the online growth in Europe and North America other parts of the globe are booming. Sports books that are Asia facing are having a record year as broadband starts to roll out in the home giving access to an even greater number of gamblers.
Not that this is the only means of accessing the Internet. Internet cafes in China and the Far East are hugely popular because people like to congregate and share information, they like the camaraderie of being in a group.
Poker has gained traction also in Asia and we see reports of players using multiple screens sometimes playing 20 games at once!
This year we have the World Cup in South Africa and we expect to see a betting frenzy approaching £750 million (GBP) for the UK alone. Every World Cup takes sports betting to a new high and because South Africa enjoys the same time zone as Europe soccer fans will be able to bet and watch the games on TV during day and evening times.
Written exclusively for www.continen8.com by Warwick Bartlett, Chief Executive of GBGC (Global Betting & gaming Consultants)