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Montevideo, September 20th 2020 - 20:33 UTC

 

 

The Effect of Bingo on the UK Economy: An Ever-Growing Market

Monday, August 31st 2020 - 04:27 UTC
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Online gambling has been experiencing rapid growth. Currently valued at £35 billion, online gambling establishments are expected to rake in more than double by 2024: £72 billion Online gambling has been experiencing rapid growth. Currently valued at £35 billion, online gambling establishments are expected to rake in more than double by 2024: £72 billion

It doesn’t take an advanced degree in economics to know that gambling is a huge and profitable market, both in the UK and around the world. But you might be surprised at just how big the market is.

According to a 2020 Business Research Company study, the global gambling market is about $564 billion. That’s more than £430 billion. And the market continues to grow at 5.9% per year.

Online gambling in particular has been experiencing rapid growth. Currently valued at £35 billion, online gambling establishments are expected to rake in more than double by 2024: £72 billion. That projection was made before the coronavirus pandemic persuaded many gamblers to stay home and gamble by Wi-Fi instead of at the pub.

Rapid advancements in technology have benefited gambling, both in the pub and on the net. Websites are more accessible, have more features, offer more games, support more deposit and payout options, and have adopted new technologies to guarantee safety and fairness. Consequently, users feel more secure to spend money and gamble online. A 2018 US Supreme Court decision didn’t hurt either. It made sports betting legal in the US, opening up a huge market for betting companies.

Gambling in the UK

Gambling has a rich and storied history that is intertwined with the story of Great Britain itself. We know that there was gambling in the British Isles before there were Romans. England was one of the first countries to nationalize and regulate the gambling industry. That was back in the 15th century.

Legendary bookmakers like William Hill hail from the UK, and much of the world gamblers using lingo that was first spoken aloud by British voices. Gambling is so thoroughly associated with Britain that stereotypical images of British bookies and packed horse tracks feature prominently in postcards and guidebooks.

The UK gambling market’s size reflects this traditional enthusiasm. The UK’s gross gambling yield - the amount of money operators keep after paying out winnings - was about £14.4 billion in 2018. That’s a rise of £6 compared to 2011’s £8.4 billion. Clearly, growth has been rapid.

History of Bingo

Bingo holds a special place in the UK’s gambling history. While the game was popular throughout the 20th century, it wasn’t until the 1960’s Betting and Gaming Act that bingo’s popularity surged and the game transformed from a simple game to a big business that raked in huge amounts of revenue and big pots for winners. The 1960 act made bingo a legal form of gambling throughout the UK, and over the next few years, the gambling establishment built hundreds of bingo halls.

Just how popular was bingo in the UK? One operator, Mecca Bingo, reported that during the 1960s, more than 150,000 players per day visited its bingo parlors. By 1963, UK bingo club membership had reached a jaw-dropping 14 million. When you take into account that the UK had a population of 53.5 million that year, you can see just how popular the simple social game had become.

Bingo halls kept popping up around the country. A count in 1983 identified more than 1,600 venues in big cities and small towns alike.

Business began declining in the 1990s with the launch of the National Lottery and the increasing popularity of the internet. A 2007 smoking ban hit the industry hard.

Taxes nearly spelled the end of the era. For obscure historical reasons, bingo had the highest tax rate in the entire gambling industry - 20%, compared to 15% for bookmakers and 12% for lottery tickets.

But the bingo tax was cut to 10% in 2014, and the UK’s favorite social game began to make a comeback - particularly in the online world.

Bingo Now

Online bingo parlors have turned out to be a financial juggernaut. In the 2018-2019 UK tax year, authorities say, online bingo venues generated more than £1 billion of revenue. The 2009-2010 tax year was even better: £1.34 billion.

Compared to other types of gambling in the UK, bingo is the fourth most profitable. Bingo parlors achieved a gross gambling yield of £688.3 million in 2018.

The explosion in online bingo makes financial estimates tricky. Government data treats remote betting, bingo, and casino gambling as a single type of business that contributes £5.3 billion to the overall gross gambling yield. The UK Gambling Commission reports that the GGY for “remote bingo” was £198 million in 2018-2019.

Bingo represented a 3% share of the UK’s online gambling market in 2018. Brick-and-mortar bingo parlors were 4.7%. In brick-and-mortar gambling establishments, bingo accounts for a 51.4% share in revenues compared to other games.

In a recent survey of UK online gamblers, 24.2% said they enjoyed online bingo.

How Much Does Bingo Contribute to the UK Economy?

Economists define “contribution” as “gross changes in a region’s existing economy that can be attributed to a certain industry or sector.” Let’s run the numbers for bingo.

Bingo generated about £1 billion in revenue in 2018-2019. This can certainly be classified as a significant contribution, larger than Spotify and Netflix combined. In 2016-2017, when bingo pulled in more than a billion pounds, Spotify and Netflix generated £750 million in total.

Media research firm Midia reported in 2019 that 5.6 million people played bingo that year - more than those who subscribed to Amazon (4.8 million) or listened to music via Apple (3.8 million).

When it comes to taxation, we know only that UK revenue and customs duty receipts for bingo amounted to £30.8 million in 2019-2020.

The Future of Bingo

While the number of bingo halls has fluctuated recently, it seems that bingo is benefiting from the gambling industry’s overall growth. The switch to online environments has increased bingo’s popularity and brought it closer to the younger generations, especially young women.

While the coronavirus has negatively impacted gambling and betting in the UK, if and when things get back to normal, it’s safe to say that bingo will continue its resurgence.

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