Source: GLOBAL BETTING AND GAMING CONSULTANTS
London th July 15 , 2002
BETTING AND GAMING INDUSTRY BECOMES A GLOBAL PROPOSITION? nd
Global Betting and Gaming Consultants today publish their 2 annual review of global gambling market entitled ‘Global Gambling Comes of Age’. The report tracks the growth of the industry on global basis concluding that the development of the Internet as an effective market channel has enabled operators to bridge national boundaries and reach customers in markets to date out of their reach. GBGC believe that this trend will provide good news for the growth of the land-based industry as well as in cyberspace. Now that governments have seen that they cannot control the growth of Internet gambling they are gradually being forced to licence and regulate Internet betting and gaming as well as increasingly deregulate their own domestic land-based markets in order to protect and develop public revenues and currency exchange at a time when increasing direct taxation of individuals is generally regarded to equate to political suicide. A decade or so of great change in the industry has seen government reviews of the industry in just about all of the major betting and gaming jurisdictions. Some of the many developments have included the growth of commercial casinos in the U.S. Mid-West, Indian Gaming, ‘racinos’ (slots at racetracks), the UK’s National Lottery, casinos and a National Lottery in South Africa, the growth of the ‘pokie’ machine across most of Australia, the expansion of casinos in both Australia and New Zealand, the growth of the horseracing industry as well as the first casino to target domestic customers in South Korea, the introduction of sports betting in Greece and across many nations in Eastern Europe, the deregulation of casinos in Switzerland, etc. Gains have not been as high as might have been expected. Horserace betting in Hong Kong and Japan and Pachinko in the latter have seen all of the gains in the early and mid-1990’s wiped out by economic slowdown, a desire for more up-to-date gambling opportunities and a migration to illegal sports betting. The key driver to betting is prosperity; you can’t bet what you haven’t got! Despite this the global betting and gaming industry is now immense. Once prohibited across the majority of the globe, today in 247 of the 259 jurisdictions GBGC cover 247 at least some form of legal betting and gaming was on offer and the number is on the increase. GBGC found that the global betting and gaming industry had a gross turnover (drop for casinos and gaming machines) of just short of US$950bn last year generating gross profits of just over US$200bn and net revenues for the industry of US$115bn after taxes, levies and payments to good causes had been met.
Press Release
Leading Global Betting and Gaming Nations (Gross Profits) 70,000 60,000
US$m
50,000 40,000 30,000 20,000 10,000
US
Japan
UK
Australia
Spain
Canada
Italy
France
India
Germany
0
1
2
3
4
5
6
7
8
9
10
Source: Global Betting and Gaming Consultants Average Gambling Loss per Adult 600 500
US$
400 300 200 100
Australia
Japan
Norway
Singapore
Hong Kong
Canada
US
Spain
UK
New Zealand
0
1
2
3
4
5
6
7
8
9
10
Source: Global Betting and Gaming Consultants Recent years have seen the US take Japan’s mantel as the leading gambling nation. Continued deregulation in the former has enabled considerable growth in the former, particularly in the commercial casino and Indian gaming sectors. Whilst the Japanese market has shrunk due to both the performance of the economy and a new breed of consumers who demand more in their leisure experience than the strictly limited gambling industry can deliver at present. The Australians continue to have the highest gambling losses per adult at US$525 per annum as a result of the growth of the ‘pokie’ machine.
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Global Amount GGY by Product 2000 70 60
US$bn
50 40 30 20 10
Other
Machines
Lottery
Casinos
Sports
Jai Alai/ Greyhounds
FO HR Betting
PM HR Betting
0
Source GBGC Analysis Lotteries are now well established in most jurisdictions round the globe and operate on the highest margin of any betting and gaming sector. Therefore it is no surprise that they are the most valuable sector of the betting and gaming industry interns of gross profits generated at just over US$61bn. Casinos and gaming machines follow closely behind but the betting sector is worth much less. Although GBGC see some strong growth for lotteries generated by the continued development of the Chinese and Indian markets which between them account for over 40% of the world’s adult population the betting sector is expected to close the gap on its gaming counterparts. Sports betting will continue to grow strongly, with legalisation a strong possibility in Hong Kong in the near future and even a possibility in the US in the longer-term. In addition GBGC believe that horserace betting is set to enjoy a renaissance as ‘racinos’ spread around the globe (they are currently only available in parts and the US, Canada and South Africa and are expected to develop in the UK once the Budd proposals have become law) and new sports betting customers are expected in time to migrate toward this more sophisticated betting product. Going forward GBGC expects the industry to continue to grow strongly in the majority of areas. Forthcoming opportunities include the implementation of the proposals set out in the Budd Report, which are expected to increase the number of UK casinos to over 200. Casinos are also likely to be introduced in Brazil, Mexico as well as the possibility that there could be a limited number of properties developed in Japan and Indonesia. Gaming machines outside of casinos may well be the sector that sees the least growth with Pachinko revenues continuing to decline and video lottery terminals causing controversy in Canada and the number of ‘pokie’ machines being reduced in Australia due to their addictive nature. As a result of the continued deregulation and the general upswing GBGC see major global opportunities for betting and gaming operators. At present no gambling operator could claim to be truly global. Casinos Austria is the only player that operates on all of the globe’s continents as the majority of the major US companies opt to concentrate on their own domestic market. Generally companies have been reticent to venture out of their home jurisdictions due to past experience when prejudicial local tax changes and the choice of wrong partners for joint ventures has held developments back, though recently there seems to have been more interest. For instance Stanley Leisure of the UK has developed a successful chain of betting shops in Croatia and a number of US gaming operators and suppliers have suggested that they will However now GBGC believe that the globalisation of the industry and the desire of governments not to lose potential tax income will open up a number of new land-based domestic markets. Already the Internet has become profitable with Ladbrokes, William Hill, Coral and Sportingbet all making money. The Hong Kong authorities have tried to ban and failed Internet betting during the recent World Cup. Illegal betting reached new highs and is now likely to be legalised. The Internet is set to grow further as those 30% of customers who are socially excluded from credit will have access to digital cash. 3
Press Release
The expansion of the gambling industry in the UK is ideally suited to the skills that are available. We note that Japanese firms have led the electronics and manufacturing markets, the US oil, food, drinks, software and oil, the Germans at the top end of the car and appliance market and the UK leads the way in the financial sector. Gambling is a purely transaction-based business and so the opportunity exists for the UK established brands in the industry to build on this knowledge base. The UK’s leading gambling players have the credentials to develop a global presence globally both on the ground and in cyberspace. They already set the odds for the world’s sports events out side the UK and have many of the leading horseracing and sporting events on their doorstep. The Premiership has become a major global brand and the British horseracing calendar is by the strongest in the world, including Ascot, the Derby and the Grand National to name a few. With other sporting events such as the British Grand Prix, the FA Cup, Wimbledon, International Cricket, the Six Nations Rugby, the British Open, etc.
The UK's approach to regulating gambling has resulted in a crime free industry, value for money for the gambler and healthy revenues for the taxman. It has also given birth to some of the best gambling companies in the world, a fact acknowledged by the stock market in making William Hill's recent IPO one of the best received floats in a long time. Further deregulation in the UK brings even more opportunities for us, and while much of the rest of the world still wrestles with a regulatory mess of prohibition and protectionism, UK organisations like William Hill also have tremendous opportunities overseas. The 2nd Global Gambling report identifies some of these, and in an industry where accurate global data is hard to come by, makes a pretty fair stab at identifying and quantifying some of the major trends and issues. David Harding CEO William Hill
BACKGROUND st
Following Global Betting and Gaming Consultants’ highly successful 1 Annual Review of the Global nd Market comes this 2 edition, Global Gambling Comes of Age. This is the only comprehensive annual global review of the industry that accurately sizes the market, provides in depth analysis and projects the future trends across all of the major betting and gaming sectors including: • • • • • • • • •
Sports Betting; Horse and Greyhound Betting; Commercial Casinos; Indian Gaming; Gaming Machines inc. Pachinko; Lotteries; Bingo/Keno; Interactive Gambling; Charity/Minor Gaming.
Global Gambling Comes of Age provides an up-to-date guide to the global betting and gaming market based on high quantity research from a leading specialist international betting and gaming consultancy. The robust analysis is based on official statistics, corporate information/press releases, annual reports, conference calls, consultation with leading players from the industry, information provided by betting and gaming boards and commissions. The result is that approximately 82 per cent of the value of the market is based on data gathered from primary information sources. Consequently, the report provides what is almost certainly the most accurate assessment of the size of the each sector and the overall market for both land-based and interactive gambling. Global Gambling Comes of Age includes detailed analysis on 259 jurisdictions and 4 federal areas across six global regions making it the most comprehensive and up-to-date review of the industry ever produced. It contains 700 pages packed with all the latest information and high quality analysis including 1,000 referenced corporate and regulatory web sites. The report is of interest to any organisation that has the intention of truly globalising their business and/or wishes to know about new and emerging markets with their own unique cultures and gambling patterns. 4
Press Release
Warwick Bartlett founded GBGC in 1999. Since then GBGC have developed as one of the leading specialist gambling industry consultancies. In addition to their annual review GBGC have been providing top-flight tailor-made solutions to all sections of the betting and gaming industry. FURTHER DETAILS (including detailed contents from) Global Betting and Gaming Consultants Head Office 23b St Michael’s Street West Bromwich West Midlands United Kingdom B70 7AB Telephone: Fax: Weekends Cell E-mail Warwick Bartlett at: Visit us online at:
+44 121 553 7493 +44 121 553 6990 44 1299402339 07712657736
[email protected] www.bettingconsultants.com
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