Recession Creates a Perfect Storm for Internet Gambling – Land Based Businesses to Suffer. Says new report from GBGC
In spite of the current global financial crises, the world’ gambling market is set to grow from US$345bn in 2007 to US$433bn by 2012 according to a new report published by Global Betting & Gaming Consultants (GBGC) entitled: “Change is on the Cards.”
However, it won’t be plain sailing for some sectors, according to GBGC’ Chief Executive, Warwick Bartlett.
“The slowdown in the USA will hit the pockets of Americans and Las Vegas will feel the effect of that along with high energy costs and a transportation system reliant on road and air. The US has not invested sufficiently in high speed rail and destination resorts going forward will suffer as the cost of carbon-based fuels continues to be an issue of cost and supply,” he said.
Bartlett is also of the opinion that the UK has missed out on the opportunity to attract the global gambling market to the UK where he feels the gambler is better off due to the probity of the operators, social responsibility, and the value offered.
“The bookmakers in October 2001 did a deal with the then Chancellor Gordon Brown to repatriate their internet gambling sites back to the UK in exchange for betting to be taxed on bookmakers’ gross profits. For five years it has worked well but now the bookmakers are losing market share to offshore operators and the government needs to re-think its strategy. The offshore bookmakers are now investing the tax saving in marketing and scooping up the business. The current ‚’gentlemen’s agreement’ is not sustainable in my view,” said Bartlett. “The UK is missing the opportunity to create jobs, wealth, and taxation in a sustainable industry.”
“Change is on the Cards” points to an expanding market across Europe as governments come to terms with rulings from the European Courts of Justice that gamblers should have the same choice and value as shoppers. In Asia, the consultancy is optimistic about the prospects for the two mega casinos in Singapore with the potential for the second largest gambling nation, Japan, to have a legal casino within 5 years.
The current economic downturn with high energy costs, cheap broadband internet connection and a smoking ban in all licensed premises in most countries of the world is creating a perfect storm for internet gambling.
“People are leaving their cars in the garage, playing online bingo or watching a match on TV and placing a bet from the comfort of an armchair,” said Bartlett. “The land based businesses are going to find it hard to compete with the value on the internet and with as much as 30% of gambling revenue now leaving the UK and going offshore the government should take note.”