Both the UK video gaming and gambling industries have been expanding in recent years, especially online. What does the future hold for them, particularly the gambling industry which is facing increasingly stricter regulation?
Last year saw the UK video gaming industry seeing significant expansion. There was an increase of 24% in the number of gaming companies last year. It is proving to be an industry that is making a significant contribution to the UK economy with a valuation of £4.6 billion. That is a higher valuation than for the music industry and just below the TV and film industries £5 billion.
There was however a 4.4% contraction for the total video gaming industry. That was caused by a fall of 35% for physical game sales. That was not helped by High Street retailer Game showing less focus on this area of the industry. It’s the online side of the industry that is seeing growth. There was an increase of 12% in subscription revenues and a 2.6% increase for mobile gaming.
Further expansion is fully expected in the future with the estimate being that by 2028, the industry could have a valuation of £8.4 billion. This is being helped by the technological advancements that are being made and the emerging talent being seen in those creating new and exciting games.
The UK Gambling Commission recently published data that compared Q4 of the 2024-25 financial year to the previous 12 months. Online total Gross Gambling Yield (GGY) for the first three months of this year was £1.45 billion. That was an increase of 7% from the previous period 12 months ago.
The number of bets/spins were 25.2 billion, a rise of 5% and there was a 2% increase in the average monthly active accounts, now totaling 13.5 million. For real event betting, GGY was up 5% to £596 million but there was a 1% fall in the average monthly active accounts.
An important part of the gambling industry is slot games. Provided by trusted online casinos in the UK, slots GGY was up 11% to £689 million with a 6% rise in the number of spins with a total of 23.4 billion, as per offersbet.co.uk data. 10.1 million online slots sessions lasted over an hour, though the average session length was 17 minutes. The number of sessions that did go over the hour mark was 6%.
Will those impressive figures be maintained or improved on in the future? There has been concern over how safe online slot games are for players. They are considered to be highly addictive as players try to win huge cash prizes.
Previously, there has not been a maximum stake limit for the games. That has now changed though with a new limit of £2 for players aged between 18 and 24 and £5 for older players. There are still concerns though that the speed of the games need to be further reduced. Players can lose a large amount of money in a short period of time.
The UK gambling industry is facing stricter regulation. This has been seen with more affordability checks being made on players. These are unpopular and the fear is that an increasing number of players will leave the licensed market and play on the unlicensed and unregulated market.
Another financial pressure is the introduction of a mandatory gambling levy this year. The intention is to raise £100 million from gambling companies. This will see funds raised being used to help fund areas such as the treatment of those who suffer gambling harm and research into the subject.
There are also concerns that higher taxation is on its way. Already both the gaming and gambling industries have had to cope with the National Insurance increases that were announced in last autumn’s budget.
Now there are plans for changes in the way in which gambling companies are taxed. A Remote Betting & Gaming Duty is being considered. This would replace the current three-rate system that is in place.
A consultation period is currently taking place and will carry on until July 21. The final proposals are expected to be confirmed in this autumn’s budget. There are fears though that the tax rate for gambling companies will be increased.
Grianne Hurst is the CEO of the Betting and Gaming Council (BGC) and has said any increases would be “self-defeating” for the government. An increase would make “a mockery” of Labour’s intention to create growth in the economy. The CEO added that gambling reforms that have already taken place have cost the industry over £1 billion in lost revenue.
The CEO of leading gambling company Entain believes that any changes wouldn’t commence until 2028. A “long journey” is expected and she added: “a lot can happen between now and then.”
Login to Geektown