Insight
UK SPORTS BETTING Third Bridge
term, we could see similar restrictions online as has been implemented in the retail channel, primarily deposit and stake limits and a heightened focus on responsible gambling.
Secondly tax. Te same pressure that is pushing back against regulation might also force the Treasury to increase taxes on the industry as a whole. Online betting, gaming, and retail sites are contenders. As taxes cannot be passed onto customers, they will be absorbed by the bookies and could have material implications for profitability.
Tirdly, the overall economy. Few doubt that the coming months and years will get more difficult and many consumers will be forced to curtail discretionary spend. Nobody knows if and when the economy will normalise and how completely our behaviour will go back to pre-Covid patterns. What we do know is that whilst some have suffered, others have done surprising well out of lockdown and feel desperate for a little
excitement. Te allure of the licensed betting office hasn't diminished and even during times of hardship perhaps people will value the escapism and hope a flutter can offer?
So what of the retail estates?
A decade ago there were around 11,000 betting shops on the high street. Before FOBT regulation, that number was more like 8000-9000. Post- FOBT, our experts indicate that 4,500-5000 betting shops were expected to remain open. We know that retail was in structural decline pre- Covid, falling one-two per cent per year. Te question now is whether Covid will accelerate that trend.
In practice, shop closures mean brands like William Hill might decrease from around 1,400 retail units to more like 1,200 over several years. GVC run in the region of 2,500 shops. Again we'll see a similar picture with perhaps 2,150 shops remaining. Paddy Power might fare better
because of their higher footfall locations. For them, 500 units might turn into 475. A real challenge is how to retain customers when sites are closed. We are hearing that up to 50 per cent of business is lost due to closures. Combined with the £30,000-40,000 average bill to close a site, operators face unique challenges in the years ahead.
A bright future
Whilst it's easy to assume the worst-case scenario, there are positives to take away from the current climate. Bookies have been forced to rethink their organisational structure, accelerate their technological development and make hard decisions regarding the shape of their estates. With a working vaccine, these changes will allow for a more efficient way of trading.
Whilst the retail landscape will never return to its heydays, there could still be a bright future for local betting shops.
NEWSWIRE / INTERACTIVE / MARKET DATA P25
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