New Dawn Yet To Break For UK Casinos
Six years on from Parliament passing the Gambling Act 2005, the UK’ casino industry is yet to see the new dawn that was promised by the regulation.
John Whittingdale MP, chair of a special evidence committee on the responsibilities of the DCMS, asked Culture Secretary Jeremy Hunt MP in April “In the six years since the [Gambling] Act has been passed not a single new licence has been granted …. Do you not think that this Act has been a complete fiasco?” To which the Minister replied, “It hasn’t worked – you’re absolutely right. There has been a whole series of problems with it”.
Since the Act was passed casino drop increased steadily each year reaching a peak of GB£ 4.53 billion in 2008/2009 before falling back last year to GB£ 4.39 billion. But whilst drop has been improving the gross win – the amount casinos keep from losing customers – has declined significantly.
Gross win rose above GB£ 700 million in 2004/2005 but has not mirrored that peak in recent years. More worryingly for casino operators there seems to be a long term decline in the gross win percentage. Gaming is a cyclical industry but margins in recent years have been around the 14% – 15% mark compared with 18% – 19% in the 1980s.
The Gambling Commission reported that there were four fewer casino operating in 2009/2010 (141) than in the previous year (145) and Genting Casinos announced this month (April 2011) that it is considering closing its Manchester Mint, Leicester Electric Circus, and Great Yarmouth Mint casinos.
One of the aims of the Gambling Act was to allow additional casinos to be created and the process of awarding some of these licences has got underway:
‚Ä¢ Newham council awarded a licence to Aspers in March 2011 for a casino as part of the Westfield Stratford City development
‚Ä¢ Apollo resorts was awarded a provisional licence by Kingston-upon-Hull council in February 2011
‚Ä¢ Middlesbrough has begun the process for awarding its casino licence
‚Ä¢ Scarborough Borough council received two applications for its small casino
But whilst gross win and the number of properties have fallen, visiting casinos has never been more popular. In 2010 visits to casinos passed 17 million for the first time and up by 3% on the previous year. In the last ten years casino attendance has risen by 51%.
Warwick Bartlett, Chief Executive of Global Betting and Gaming Consultants, commented, “The UK’ casino industry has yet to be revolutionised by the implementation of the Gambling Act 2005. UK consumers are visiting casinos in higher numbers than ever before and it seems like an opportunity has so far been missed to capitalise upon this.”
“Gambling tourism has become the latest travel trend with gamblers travelling considerable distances to enjoy their hobby. Unless operators in the UK offer what is available elsewhere the country will lose out on what has become an industry highly beneficial to GDP, employing many people.
“The legislation and the tax rate need to change if the UK is to remain competitive.”
Global Casino Market
Globally, the casino market rose by 12.5% to US$ 95.1 billion in 2010 but it was mixed fortunes for different jurisdictions as certain parts of the gaming industry continued to be hit by the recession.
‚Ä¢ Nevada’ casino revenues fell by 4.5% in 2010
‚Ä¢ New Jersey’ casino revenues fell by 9.5% in 2010
‚Ä¢ South Africa’ casino revenues rose by 1.7%
‚Ä¢ Macau’ casino revenues rose by 58%
New casinos are still establishing themselves in markets like Singapore, the Philippines, and Chile and Macau’ casinos continue to break all revenue records. GBGC, therefore, forecasts in the sixth edition of its Global Gambling Report that world casino revenues will surpass US$ 100 billion in 2011 and reach US$ 128 billion by 2013.
The 6th Edition of GBGC’ Global Gambling Report
The 6th Edition of GBGC’ Global Gambling Report Betting on Regulation was published in April 2011. It contains more than 1,500 pages of data, analysis, and commentary on gambling activities in over 250 individual jurisdictions on every continent. The report is available for purchase as an annual subscription for £3,950 (+VAT), with access to updates throughout the year.