Insight
UK SPORTS BETTING Third Bridge
Harry Barnick, Senior Analyst, Tird Bridge
Harry Barnick is Senior Analyst at Third Bridge group, a global primary research firm, where he specialises in covering the retail fashion, luxury brands and leisure sector industries including gambling and gaming. Harry was previously an analyst at Campbell Lutyens.
Does retail licensed sports betting have a future in the UK?
Covid has unleashed unprecedented challenges on the consumer discretionary sector. Te travel, leisure, and retail sector, to name but a few, have lost people, punters and millions of pounds. So what of the humble licensed betting office? What of the bookies that have so long adorned our high streets?
“Back in March betting shops, like all non- essential retail units, closed and bolted their doors. Then after a punishing period of zero revenues, they turned the lights back on in June. New social distancing measures were put in place as well as income sapping customers capacity limits. But not every shop reopened. William Hill, for example, announced 170 closures following the first lockdown and GVC has been nibbling down their estate ever since.”
Loved and loathed in equal measure, some will be wishing away these secret places of sanctuary. Others will be hoping for a return to 'business-as-usual'. Whether we can achieve this in a post-Covid environment is yet to be seen. What we do know is that the retail sites of Flutter, GVC and William Hill, and others, face extraordinary challenges until a working vaccine allows life to normalise. Te next 12- 18 months will be crucial to the survival of the sports betting retail landscape.
However, the evidence suggests licensed betting offices may be more resilient than you expect
Back in March betting shops, like all non-essential retail units, closed and bolted their doors. Ten after a punishing period of zero revenues, they turned the lights back on in June. New social distancing measures were put in place as well as income sapping customers capacity limits. But not every shop reopened. William Hill, for example, announced 170 closures following the first lockdown and GVC has been nibbling down their estate ever since.
Next came local lockdowns. By October some 1,200 betting shops in Britain were closed once more because of local restrictions, predominantly in the North West. Ten attention turned to Wales where a firebreak measure meant another 400 closures. More recently, on 5th November this figure leapt again, as all the five and half thousand betting shops in England closed under a new national lockdown. According to the Department for Health & Social Care, licensed betting offices are a particular coronavirus risk because they are small enclosed spaces where customers linger for significant periods of time.
When a bookmaker's shop is closed, it obviously generates zero revenue. Te hope of the industry
P22 NEWSWIRE / INTERACTIVE / MARKET DATA
insiders I've spoken to is that we get back to between 80 and 90 per cent of normal business in December, and we see a sharper rebound than after the first lockdown. As we approach the end of the lockdown period, questions remain regarding the shape of restrictions after December 2nd. What we do know is that any extended lockdown into December will have a detrimental impact on revenue given the importance this month has for trading.
The worst time to be closed
As every bookmaker knows, the weeks just before Christmas are important for two reasons. Footfall is normally buoyant with bustling high streets offering a big revenue generation opportunity. No bookie will want to miss out on this time after such a difficult year - and no doubt it may prove critical for some shops.
Ten, in addition, Q4 is a crowded time for the UK's sports calendar. Sports betting is obviously really important to the retail shop side of a bookmaker's business. Insights from our experts indicate that up to half of a betting shop's revenues come from football, plus a quarter from horse racing, a bit more from greyhounds and tennis, plus a long tail of other sports. Tis means that unless it’s a tournament year, with a World Cup or other major competition, Q3 is normally the quietest period and Q4 presents an opportunity to finish the year on a high.
Won't people just migrate online?
Tere is a widely held assumption that with betting shops closed retail customers will naturally migrate online. Whilst that's true for some, our experts indicate the shift is more challenging than one would initially think. Up to 90 per cent of bets placed in a
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