This story is sponsored by Betfair
The proportion of UK adults participating in online sports betting, poker, casino and bingo fell last year, according to the most recent figures from UK regulator the Gambling Commission.
The figures published by the Commission show that in the year to the end of September 2011, 5.6% of the 4,000 adults surveyed had participated in at least one form of remote gambling in the last four weeks, down from 5.9% six months earlier.
Overall participation in remote gambling however rose to 11.9% from 11.2% during the same period when National Lottery products were included, the most popular form of online gambling in the UK.
The Commission’s most recent dataset showed that UK-regulated remote gambling – consisting of betting, bingo, poker and casino - generated £680.1m in gross gambling yield (GGY) in the year to the end of September, a figure that represented 12% of the £5.62bn generated by the entire British gambling industry. This made remote gambling the third largest sector behind the non-remote betting sector (52%) and bricks ‘n’ mortar casino gambling (15%).
This £680.1m figure represented 3% growth on the total six months earlier. However, the Commission said that with most of British consumers’ remote gambling activity not actually regulated by the Gambling Commission and taking place on non UK-regulated sites, this probably only represented around a third of the total online market.
This 3% figure also compared unfavourably to the 20% growth achieved in the year to the end of March, clearly showing the effect of Betfair’s offshore move beginning to kick in. The Commission said it expected the GGY from UK-licensed operators to fall as this became fully realised, with only bet365 and Coral left standing as major operators with appreciable parts of their online businesses – their sportsbooks – regulated and taxed in the UK.
The online market as regulated by the Gambling Commission has been growing since April 2010, following the significant 23% fall in the preceding 12 months as several major UK brands - including Ladbrokes and William Hill - relocated their online businesses overseas to Gibraltar to better compete against operators targeting the market from lower tax jurisdictions such as Ireland, Gibraltar, Alderney and the Isle of Man.
The UK has announced plans to require all online operators to be licensed by the Gambling Commission and to pay tax on all bets placed by UK customers from December 2014. The formal consultation on the plans to move to a place-of-consumption tax, based on location of gambler as opposed to company, closed last Thursday 28 June. Backbench MP Matthew Hancock has also introduced a private members’ bill to overhaul a regulatory system that he argues costs HM government £300m a year in lost tax revenues.
