The online gambling industry is firmly established in the UK now – but what’s next for bookies?
International expansion is top of the agenda for a lot of the major bookmaker brands in the UK, with companies seeking to move into new markets to increase their profits even further.
This trend has been evident for a few years now but the situation is shifting up a gear with firms keen to make sure they are at the front of the queue.
Although the amount of money being earned by UK bookies continues to rise – figures from the Gambling Commission shows the gambling industry had a total yield of £13.8 billion between October 2015 and September 2016 – it is clear companies increasingly see global expansion and new international markets as the key to their future.
But why is this – and what steps are being taken by the bookmakers to achieve this goal?
State of play in the UK
William Hill is one of the best known bookmakers in the UK, a trusted brand that has been a firm fixture on the scene for many decades.
Having already conquered online gambling in the UK, William Hill is now focused on ensuring it can roll out its product into various other growth markets around the world.
One of these is Australia, which has long been targeted by William Hill as a country where there is a lot of potential to grow in the future.
It is not just the biggest names in UK gambling who are moving abroad to boost profits either. Betway has expanded beyond the UK, with sponsorships one of the key ways the firm has sought to increase brand recognition in new markets.
The bookie – which is the primary sponsor of Premier League football club West Ham United in the UK – now has a partnership with Ashanti Gold, which is one of the most successful Ghanaian Premier League teams.
Betway has recently launched in Kenya with innovative new products
And Skybet, which is among the most dominant betting brands in the UK, having recorded a stunning 51 per cent rise in the firm’s revenue to £373.6 million in 2016, is getting in on the action too. The continent is the goal for this ambitious betting company.
Ever since the company took over Sky Deutschland and Sky Italia in a deal with 21st Century Fox in 2014 it has been plotting how best to launch its excellent betting product in Europe.
UK firms taking advantage of US ban
One of the most interesting things about the development of the betting industry over the course of the last couple of decades is the lack of impact from US-based companies.
Gambling in America is strictly regulated and although there are plenty of casinos in gambling meccas like Las Vegas in Nevada, online gambling is banned. As a result, the companies that dominate the casino industry in the United States have been deprived of one of the major growth industries of the last 15 to 20 years.
And this has allowed UK companies to step up and fill the gap, with the likes of William Hill and Paddy Power having been able to make vast amounts of money through global expansion. William Hill run a race book in Iowa for Caesars Entertainment and operate a sportsbook out of Nevada, with over 50 per cent of the state’s casino-based sportsbooks now run by Hills.
In the company’s half-year results released in August 2017, William Hill said: “We continue to be actively involved in efforts to change regulations restricting sports betting, including working with the American Gaming Association, who have made overturning the federal ban on sports betting a significant focus.”
Where does Australia fit in with future growth of online gambling?
Australia is without a doubt one of the key growth markets for betting firms in the UK and William Hill is among the betting brands to have been clear about their plan to make a move Down Under, with the company announcing a 17 per cent rise in Australian profits over the course of the first quarter of 2017.
Hills already employs 250 people across its online and telephone betting business in Australia and it seems inevitable that this number will rise quickly in the coming months and years.
According to a report from the Australian Gambling Research Centre, half of sports betting in the country is conducted online and this shift is great news for betting brands in the UK. Being able to run operations from the UK reduces the massive costs of moving into a new market and allows betting brands such as William Hill to reap massive rewards.
However, with Australia keen to protect people from gambling addiction, the country is introducing new measures to stop firms from enticing new customers with sign-up offers. This could have a significant effect on the growth potential of UK-based betting companies.
Federal human services minister Alan Tudge said: “Online gambling is growing faster than any other form of gambling and the incidences of problem gambling is higher. The gambling problems of the future will all come from the online space if we don’t put sensible protections in place now.”
America’s stance on gambling
While it does not seem likely that America’s ban on gambling in most of the country will be stopped any time soon, organisations are working to promote the benefits of betting.
The American Gaming Association (AGA) and American Sports Betting Coalition are among the bodies that have long been fighting for a change in the law that would open up another major new market for UK firms.
Speaking at a recent roundtable event in Capitol Hill, The stakes of Sports Betting: A Look at the Federal Ban and the Current Debate over Legalisation, senior vice president of public affairs at AGA Sara Stone highlighted the issues raised by an illegal gambling market. “A legal, regulated marketplace offers the potential for millions of dollars in tax revenue and an avenue for up to 150,000 jobs,” she told the September event, which was hosted by Third Way.
Public polling shows American attitudes towards gambling are also changing, with more support for a legalised industry being found in a recent vote held by the Washington Post.
The newspaper teamed up with the University of Massachusetts Lowell for the research and found that 55 per cent of Americans now approve of legalising betting on pro sporting events.
Sport looks set to play a part in the potential scrapping of America’s gambling ban, with the launch of an NHL team in Las Vegas coming in 2018, while the NFL outfit the Oakland Raiders are also planning to move to the Nevada city in the near future as well.
Marketing that catches the eye
One of the ways UK companies have spread their message around the world is through entertaining and eye-catching marketing campaigns.
Paddy Power are arguably the kings of this department, with the Irish bookmaker making headlines on a regular basis from stunts that straddle the line between offensive and funny.
Many of the other big name brands have tried to pursue a similar strategy in a bid to get their company more known around the world.
But there is no doubt that when it comes to marketing and social media, Paddy Power sits right at the top of the tree, setting an example that the rest of the industry often tries to copy.
The original is usually the best, however, and if Paddy Power – which has merged with another betting giant, Betfair – is to be successful in its bid to move into new growth markets its innovative marketing is undoubtedly going to hold the key.
Conclusions on UK bookmakers global expansion
It is clear that UK-based betting brands are on a mission to conquer the world. And why not?
The industry has been growing at a rapid rate since the arrival of the internet and millions of people enjoy having a bet while watching their favourite sport.
After all, over 100,000 people are employed by the gambling industry in the UK alone, so it is obvious that the sector is not going to go away any time soon.
While Australia is battling to get to grips with the rise of sports betting in the country, America is trying to decide whether or not to relax its own very strict laws on the pastime.
But like it or not, sports betting is here to stay and online gambling is going to remain a part of people’s lives, so it does not appear to make any sense to force them to do it illegally.
And gambling can be a force for good too, with the industry contributing £1.7 billion to good causes via the National Lottery between October 2015 and Sep 2016, according to figures from the Gambling Commission.
UK-based companies like William Hill that have aggressively pursued international expansion in the last few years will therefore have even more opportunities in the future to increase profits.
It seems the future for British betting brands is going to be extremely bright indeed.