2019, a mixed bag for the UK gambling industry By Andrew Tottenham, Managing Director, Tottenham & Co March 3, 2020 at 2:40 pm Once a year, the UK Gambling Commission (UKGC) publishes a report on the gambling activity and attitudes toward gambling of the adult population of Great Britain. The report is based on quarterly telephone and online surveys carried out the during the year. The 2019 report, which can be accessed here, contains both good news and bad news for the UK’s gambling industry. Let’s start with some of the bad news. Sadly, only 29% of those surveyed think that gambling “is conducted fairly and can be trusted”. In other words, more than two-thirds of the adult population believe gambling in the UK is crooked. Whilst this has not changed since 2018, in 2009, only half of those surveyed held this negative opinion. I cannot think of anything that has happened regarding the gambling industry in the interim to negatively impact their opinion, apart from the continuing torrent of negative media output as it relates to regulated gambling. Some people think the increasing negative attitude to gambling is related to the falling trust in public institutions in general. Ipsos MORI, one of the largest market-research companies, publishes an annual UK “Veracity Index” of professions; they ask a sample population whether or not they trust various professions to tell the truth. The level of trust, or lack of it, today in the gambling industry is similar to that of journalists (27%) and (real) estate agents (26%). At least this is above Government Ministers (17%) and politicians in general (14%), though it’s still nothing to be proud of. However, trust in the medical professions, teachers, engineers and academics remains well above 80%, doctors and nurses above 90%. Perhaps some of this declining trust has to do with the fact that public expectations have risen over time; people expect more from organisations and the people representing them. Some may seek to lower expectations in order to improve public opinion, but that is a very dangerous approach; by lowering expectations and making them easier to meet, there is a risk that this can lead to a loss of consumer confidence in the business. I think that there is a need to maintain high levels of consumer expectation and at the same time have a clear communications strategy to improve the industry’s image. I also believe that much can be learnt about successes elsewhere in the world. The industry needs to go local. Rather than supporting big charities, there would be much to be gained from supporting local charities or social projects by donating expertise, time and money. People do not see the impact from supporting large umbrella charities, no matter how good the cause, but they will notice new trees being planted in their neighbourhood park or the cleaning up of public spaces. Lobbying only gets you so far. Without public support, politicians with a negative view of gambling will feel free to act. What other nuggets appear in the report? Apparently, 82% thought there are too many opportunities to gamble and 73% think gambling is a risk to family life, but in a classic example of cognitive dissonance, 60% thought that people should have the right to gamble whenever they want. Approximately one in five of those who responded have read the terms and conditions on online gambling web sites and 65% of those found them to be useful. Clearly, they were not the ones who gambled with Moplay. Following the recent suspension of their license by the UKGC, Moplay has been declared insolvent. The kick in the tail is that their terms and conditions state that players’ funds are held separately from company funds, but that in the event of insolvency, “your funds would not be considered separate to the other company assets and you may not receive all your funds back.” Caveat emptor! Some of the information in the report relating to the online sector is good. Excluding those who have only gambled on the National Lottery, 32% had gambled both online and offline, which was flat from the prior year. However, 21% of those surveyed gambled online in the last four weeks during 2019, up a statistically significant 3 percentage points from the previous year. Again, excluding those who participate in the National Lottery, the profile of a gambler skews young: 70% below 45 years old and 42% below 35. In the previous year, these segments were 57% and 35%, respectively. This increase was driven mainly by the segment of gamblers from 35 to 44 years old, which saw a massive increase from 2018 of 27%, from 22% of respondents to 28% of respondents. Somebody is doing something right. Land -based, or as the report calls it, “in-person,” gambling has not fared well. Unsurprisingly, since the reduction in maximum stake from £100 to £2, participation in gambling on FOBT’s has almost halved from 1.5% of those surveyed in 2018 to 0.8%. Of those who bet on sports both online and land-based, the proportion who participated in “in-person” sports betting was down 32%, from 40% to 27%. Similarly, horse-race betting was down from 64% to 49%, a 23% decline. The survey does not distinguish between land-based “casino games” and those played online. Only 1.5% had played casino games in the previous 4 weeks, down a statistically insignificant 0.1%. Having said that, I expect online casino games have increased in popularity in the past year, which should mean that land-based casinos are suffering. But taking the figures from the monthly casino drop and win figures published by the UKGC, if you exclude London’s high-end casinos that cater almost exclusively to overseas gamblers, drop and win are practically the same year on year. In summary, public perception is poor. Online gambling increased and land-based gambling faces a challenge.