United Kingdom (UK)
There is a General Election in May 2015 and the Conservative and Labour Parties are presently trading at the same odds with the bookmakers. Will gambling become a political football in the run up to the election? I don’t think so; the public now see gambling as main stream entertainment and they will wish to focus on the main issues: health, cost of living and immigration. If politicians move from those three main issues and hit gambling they will be given short shrift by the electorate.
The betting shops which are already paying 15% gross profits tax will have a good year in spite of no major soccer tournaments in 2015. The improving economy, the maintenance of low interest rates for most of the year, and low energy costs will give the consumer a boost. Unless any new Government decides to mop up those benefits with tax increases.
Last year we tipped consolidation with Ladbrokes as a top pick. It did not happen although there was some significant M&A with Amaya and PokerStars, Scientific Games and Bally, IGT and GTECH.
2015 predictions – Hung Parliament with a Conservative Prime Minister. A good year for betting shops based on rising consumer spending. Coral will sell the bingo clubs and return to how it started – a bookmaker, ready for either a sale or a listing.
Last year I said ‘Lots of ifs and buts but I expect 2014 to be a good year’. It has been a good year!
I do not think that Point of Consumption Tax will really hit the industry until 2016 even though we are without a major soccer tournament in 2015 so the year on year comparisons will be harder. The improvement in the economy with the same spend on marketing from the major operators will see the industry through 2015. Profits will fall due to the tax increase by 20% to 30% but I expect revenues to be robust.
2015 prediction – The gambler will see little change in the payout, value will be maintained. Q4 2015 POCT will start to bite, expect a June 2015 budget, with Government spending cuts and tax increases. I expect to see some industry consolidation amongst those that supply the industry and operators.