Strong Revenue Figures for Online Casinos But for How Much Longer?

October of this year saw the UK Gambling Commission (UKGC) publish their latest market impact data regarding gambling behaviour. This is something the UKGC has been doing since the pandemic. The latest figures recorded operating data for October of this year. This therefore saw a comparison of Quarter 2 (Q2) which is July to September for the 2024-25 financial year and the same period in 2023-24.

Online gross gambling yield (GGY) for the quarter was £1.2 billion. That was up 0.6% on the total achieved in the same period last year. There was a big increase of 10% on the total number of bets and spins and a rise of 7% in the average number of monthly active accounts.

For land-based venues there has been a decrease in GGY of 0.4% to £539 million with total bets and spins falling by 1% to 3.1 billion.

Online gambling grew in popularity when land-based venues were closed during the pandemic lockdowns. There was a 31% increase in the numbers going online to gamble and by 2023, nearly half of UK adults went online to place bets.

Going online to gamble remains hugely popular. Players have learnt just how more convenient it is to be betting online. Another big bonus is that the advancements made in mobile phone technology means players can gamble when out and about as long as they can get an internet connection.

When gamblers are going online, many head straight to the slots section. There are hundreds of games that can be played with some massive prizes to be won, especially when playing progressive jackpot slots. They can turn a player into a millionaire with just one hugely successful spin of the reels.

GGY for online slots was £589 million for Q2 and that’s 8% higher than last year. There was also an increase of 11% in the number of spins with the number of monthly active accounts up 11% to 3.8 million. 7% of online slots sessions lasted over an hour, though the average session length was down to 17 minutes.

Further  growth is forecast for new online casinos in the UK by newsites.co.uk. The estimated annual growth rate between now and 2029 is expected to be 3.62%. Stricter regulation of the online industry could see that forecasted growth need to be reduced.

There has long been a call for the way UK online casinos are regulated. The gambling industry has seen enormous changes since the last Gambling Act which was passed in 2005. As the years have passed, anti-gambling campaigners have highlighted the problems that the growth in online casinos has been causing.

In 2023, the Conservative government finally published its White Paper on gambling reform. As expected, it concentrated on two key areas both linked to each other. One was the rise in the number of UK online casinos and the other the problems it was causing some players, especially younger players.

Suggested measures to be introduced included stricter affordability checks, a statutory levy on gambling companies and reduced maximum stake limits for online slots. This September was due to see those new maximum stakes be introduced. Labour’s victory in the July General Election led to the introduction being delayed.

Labour did support most of the contents of the White Paper. They wanted to hold meetings with the gambling industry before announcing what changes will be made. Last month saw the announcement that the new reduced maximum stake limits for online slots will be introduced next year.

As expected, the emphasis is on younger players. Those aged between 18 and 24 will not be able to stake more than £2 on a single spin of the reels. There will be a new maximum stake of £5 per spin for those players who are aged 25 and over.

There will also be the introduction of the statutory levy. The aim of this is to raise £100 million a year with funds going towards addiction treatment and reducing the stigma of those who are gambling addicts.

Both of these measures are going to affect the revenue earned by online casinos. Critics will be concerned that it is another case of the new UK government raising costs while talking about seeing growth in the economy. The Betting and Gaming Council are concerned about how the measures will affect the industry, especially the online sector. Their concern is that the government is listening too much to the views of anti-gambling campaigners.

One fear they have is that players will leave the licensed and regulated sites and move to the unregulated black market. That won’t just see a reduction in online casino revenue figures but reduce the levels of customer protection for those gambling on the black market.