ONLINE BINGO A GROWING BUSINESS

4 July 2008

More websites and more action in Europe says expert


The online bingo industry in Europe is poised for growth, writes industry expert Joe Saumarez-Smith in Bloomberg news this week, backing his assertion with some interesting statistics in a useful overview of the sector.

Saumarez-Smith reveals that Britain is the world's most developed online bingo market, with the number of websites growing from 17 in 2004 to 243 in June 2008, according to Phil Fraser of Which Bingo, operator of one of the leading bingo information sites and chairman of the 2008 Online Bingo Summit.

In Spain, the second most competitive market, the number of sites in 2008 grew to 40 from six in the past year.

A report released this month by BingoPort.co.uk, an online bingo tracking service, estimated the U.K. online bingo industry earned GBP 120 million last year on GBP 650 million of revenue, Saumarez-Smith notes, with about 500 000 British online bingo players each month, according to estimates by the UK Gambling Commission.

Online bingo isn't a new phenomenon - the first game appeared in 1995 in the U.S. - but its growth has been accelerated by the spread of broadband Internet access. And bingo players tend to be female, aged 25 to 50 and educated to high school level, says Cashcade Ltd., owner of Foxy Bingo and Think Bingo, two of the largest privately owned U.K. websites.

Al Haig-Thomas, chief executive of bingo software provider Virtue Fusion, told Saumarez-Smith that opportunities for growth are in Europe during the next one to three years, and in South America and Asia during the next five to eight years.

"We have several clients planning launches in Spain in the next three months and also new sites in Denmark, Sweden and Ireland,'' Haig-Thomas said in an interview. "All are undeveloped markets that have a history and culture of bingo halls, so you would expect them to follow the U.K. market in terms of growth.''

The UIGEA has apparently had a dampening effect on the US online bingo market, reducing the number of operational websites. although Americans still play [land] bingo extensively, often as a fund raising pastime for charity.

On the other side of the Atlantic, ITV plc has been active in introducing televised bingo shows such as Bingo Night Live, linked to the company's online ITV Bingo.com site which it developed with the Party Gaming plc group. A weekly bingo show in Sweden has become one of the most popular programs with viewers, and a number of industry observers believe that televised bingo shows linked to operational websites in this way offer good potential for the future.

Warwick Bartlett, chairman of U.K.-based Global Betting and Gaming Consultants, told the recent Bingo Summit conference in London that online bingo is still relatively immature compared with Internet casinos and sports betting. "We estimate that by 2012 online bingo will account for 25 percent of the worldwide betting market and deliver profits in excess of $2 billion," he said.

"As broadband penetration increases, people become more conscious about the cost of driving to real-world bingo halls,'' Bartlett said. "When they find that they can't smoke when they get there, playing online bingo from home becomes more and more attractive. From a customer point of view it is a great gambling proposition at a very low cost,'' he said.

Saumarez-Smith takes a balanced view of the prospects, considering the risks and legal restrictions associated with gambling in several European countries. He points out that bingo is not a game that translates well or easily in regions that have no history of land bingo halls or cultural roots in the game. He also comments on the perils of the current economic slump and its potential impact.

In the latter respect, Phil Fraser of Which Bingo notes that there are some signs of a slowdown in the British bingo market, remarking that: "It appears the market is growing at about 3 percent month on month, versus about 10 percent about a year ago. So there is some sign that the economy is having an effect on online bingo. But I would prefer to say that while it may not be recession-proof, those sort of growth numbers suggest it seems to be recession- resistant."

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