What Does 2013 Hold In Store For Gambling?
By Warwick Bartlett
“Pundits forecast not because they know, but because they are asked.”
“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.”
Economist J K Gilbraith
It is that time of year when predictions are required for the year ahead. But it is actually just as instructive to look back over the year just gone as a guide to what 2013 may have in store for the gambling sector.
2012 for the gambling industry was a tough year. UK companies fared much better than their European and US counterparts but Macau was still the shining beacon for growth.
The UK, while not brilliant, continues to tick over. Although there is no growth in the economy gambling companies continued to return dividends to shareholders as money continued to circulate. Compared to Greece, Spain, and Italy the UK is doing well (although not well enough for the Labour Party).
Labour continued to focus on the negative and drew attention to more betting shops appearing on the high street. They are concerned people are being exposed to more gambling services.
The UK high street has seen many retail businesses fall into insolvency this year: Blacks/Millets, Focus DIY, Habitat, Homeform, Jane Norman, La Senza, Past Times, Peacocks, Oddbins, TJ Hughes, Stylo Barratt, Hawkins Bazaar, GAME, Alexon, Clinton cards, Comet, Optical Express, JJB Sports were all 2012 casualties.
Interestingly most of these businesses are still trading but on a much reduced level. According to a table published recently in The Times administrators have closed 2,385 stores from the businesses listed above and 1,877 remain open. The number of those companies’ employees has shrunk from 61,743 to 28,797.
During the good times shop leases were taken on with scant regard as to what the future may bring. A rationalisation was inevitable at some point, the big question for 2013 is this: is the economy on the turn, is the worst over?
Only the future will decide whether there has been too much exuberance in the opening of betting shops on the UK’s high streets. Granted, bookmakers have managed to negotiate new leases with sensible break clauses but what of those taken out during the heady days of 2007?
Greece is a very good example of an economy that falls from recession to depression and how poor economic results hit the gambling industry.
Revenues in Greek casino have shown substantial falls has fallen since the start of the financial crisis. Sports betting revenues for the last nine months in Greece were down 11.7% YOY and this included the European Football Championships. Lotteries are down 6% YOY.
A 10% fall in revenue for some bookmakers could reduce profits by between 35% and 40%.