CEO Warren Bartlett takes an educated guess on what might come about in the new year
Global Betting and Gaming Consultant's Warren Bartlett has developed a reputation for accuracy in his annual predictions for the online gambling industry, and this year he has published his crystal ball findings on a wide range of likely developments which include:
1. The UK point-of-consumption tax was forecast to raise £280 million in its first year, but is likely to be closer to £475 million.
2. Social responsibility requirements will cost the industry 3 percent in revenue terms or 10 percent of net profit before tax in 2016, rising over the next five years to 15 percent in today's terms and 35 percent of profits.
3. The Chancellor does not seem to be able to overcome the entitlement culture in the UK and faces opposition to any change to the benefit system. This could mean that tax increases will follow which will be detrimental to gambling either by way of VAT or a direct increase in gambling taxes.
4. Top picks for consolidation targets are: 888, Unibet, Bet Victor, and Skybet. A merger between Skybet and 888 would work. The mergers taking place already will create a 'mask' on corporate performance.
5. The Competition and Markets Authority (CMA) will see that the combined business of Coral and Ladbrokes will take a 45 percent market share for betting shops. In 1998 the same merger would have produced a market share of 30 percent. In spite of the changes that have taken place since 1998 many shops will have to be sold. According to the Local Data Company 19 percent of Ladbrokes shops have a Coral shop just 200 yards away. Shop sales could be between 800 to a 1,000, with buyers like Paddy Power, William Hill, Betfred, or private equity outfits.
William Hill used to complain that they could not grow their business because a 2,200 cap was placed on the number of shops they could own, yet the proposed merger creates a 4,050 shop estate. William Hill will no doubt argue that their business has been unfairly restrained over the years.
If the CMA is consistent the 2200 cap will remain in place or they will advise the merger not to go ahead as they did in 1998.
Prediction: a compromise that allows William Hill to grow its base number of shops, probably buying some out of the merger, with up to one thousand shops either closing or being transferred.
6. The UEFA European Football tournament 2016 will exceed betting revenue expectations. Virtually all of the major countries have qualified and several EU members have introduced internet gambling regulation since the last tournament in 2012. GBGC expects total gambling turnover for the UEFA European Championship 2016 to be in the region of US$6 billion.
For full details visit:
http://www.gbgc.com/gambling-predictions-for-2016-uk/ and http://www.gbgc.com/gambling-predictions-for-2016-usa-europe-et-al/
Online Casino News Courtesy of Infopowa