“The end of the British high street” is a term that is used more often in national news organizations. Recently, there have been an increase in companies that are in financial difficulty or having to close for good. Most likely, this is a consequence of the growth of online shopping , however other factors, such as the rise in costs and poor infrastructure are also to be blamed. Despite the precarious position the majority of high-street shops find themselves in today there are many who believe that they can conquer the obstacles they face.
We have talked about high street stores in general terms, but what we are most interested is betting outlets. Many who oppose gambling have expressed their displeasure at the huge number of betting establishments on the average British high street. But will those who oppose gambling remain in the same mindset when retail stores are abandoned? A bookmaker might not be able to offer the same appeal like an artisan bakery or a boutique clothing shop; but such are some of the issues of the contemporary high-street, if bookshops disappeared, then more than likely shops would simply fall empty. This means there would be the property owners would not get a rent payment, no tax for government and councils and no job opportunities for local people.
Do bookies remain presence in our cities or is it just a matter of time before they move all their business online? For those of you that frequently visit your local bookie shop to place your bets, the thought of them disappearing for good could be a worrying one. While it’s impossible to know what the future holds, by examining the current trends and information to make an informed forecast of what lies ahead for betting shops.
Fixed-Odds Betting Terminals Changes
While we frequently talk about the high-street shops as a homogenous set of shops but each sector has its own specific difficulties. The growth of Amazon in particular, for example, has created an even greater threat to stores than your local greengrocer (for currently even though Amazon is a target for just about all areas of retail! ).
Sometimes the threat comes from competition . However, in some instances, it can come through legislation from the government as bookmakers discovered. In the year 2019, the UK government chose to reduce the maximum limit for betting on Fixed-odds gambling terminals (FOBT) from PS100 and down to PS2. This was a significant change not only in terms of responsible gambling but also because FOBTs were accountable for PS1.7bn of high-street bookmakers’ PS3.2bn annual revenue – which is a significant portion.
Although culture minister Jeremy Wright praised the move as a “significant advancement in protecting vulnerable individuals” however, it could become a major issue for bookshops across the country. A report that was published in 2018, commissioned by Association of British Bookmakers, forecast that the move to FOBTs could result in the closing of around 4,500 gambling shops (approximately 50 percent). It is important to note that this this report, written by the accountancy firm KPMG and was criticized by many as exaggerating dangers. Even Paddy Power declared that although a PS2 stake limit might be able to have “some effect” for betting establishments but it was “far smaller” in comparison to those in the AAB depicted. The view was echoed by Matt Zarb-Cousin speaking on behalf of the campaign group Fairer Gambling.
In the debate over what effect this proposed FOBTs regulation would haveon betting shops, there was no doubt that they could harm betting shops to some degree. For one thing, FOBTs had always been a cash cow for many bookies in the high-street. The new rules came into force on the 1st April 2019 and, one month later, the machine revenues had fallen by about 40 percent. The major issue was and is still for bookmakers that consumers were spending less money in total, rather than spending it elsewhere in the shop.
Some betting shops near me noted there was practically no increase in their over-the counter betting, while other bookies had a small rise of about 10%. Over a year later in the month of October, 2020 GVC (Ladbrokes & Coral) said that machine revenue decreased by 36%, while betting revenue had risen only 7 percent.
Prior to the rule change FOBTs accounted for 57% of betting shop take home, up from 38% in 2008/09, this was a huge loss of revenue. Paddy Power estimated that its annual losses would range from PS36m and PS47m because of the actions of the government. But the Irish bookmaker stayed largely defiant stating they were not expecting to have to close any of their shops. They were not the only ones in this regard, despite all of their competitors distinctly more negative in their forecasts. In the end, for many of the individual shops and businesses, the new FOBT regulations made the difference between running net profit and operating at a loss.
Start of a Decline
After reading the article above, it should come as no surprise that several betting outlets on the street had to shut, in part due to the recent FOTB law. In October of 2020, an exclusive article published by The Mirror revealed that 460 bookmakers in the high street had been shut from the end of previous year. This was an 12.2% reduction from the total number of high street shops.
Across all locations, including those that aren’t in the vicinity of the main street, the decrease was at 11.3 percent. While substantial figures, this is much lower than what many expected. Indeed, GVC (owners of Ladbrokes and Coral) only ended up closing half the stores it were expecting to close by March 2020.
The Coronavirus Challenge
The changes to FOBTs have definitely been the main reason behind the closure of betting shops on high streets. Even before the coronavirus epidemic brought the country to a impasse, a number of shops were already shut down or were in the process of doing so. But it would be inaccurate to think that the problems of Covid-19 caused no harm to the betting industry. In the short run the returns fell as sports events stopped running and the long-term consequence is that even more high street betting shops could close.
In August of 2020, William Hill made the decision not to reopen the 119 high-street stores that were temporarily closed due to Corona virus lockdown. When they announced the decision, they declared that they expected “that long-term retail footfall would not be able to return to levels pre-COVID”. Even though William Hill were alone in making such a decision, their forecast of footfall could be misplaced. Many gamblers forced to take their business online after all local establishments shut down, may not go back to the ways they used to.
As with other sectors as well, the current situation triggered by the pandemic may serve to hasten the move towards online betting. Customers that had never tried betting online could have come across its ease of use. Additionally, those who love FOBTs will have noticed that stakes in retail stores are only PS2 and online, for now at least it is possible to wager more and select from a broader selection of games.
Punters Increasing Betting Online
Since lockdown meant there was no chance of betting in the store at their high-street store, the obvious alternative was betting online. Because of the absence of sporting events, this generally required betting on games such as virtual sports or gambling games like roulette or slots, rather than actual sporting events.
Mobile Betting
This rise in popularity has been fueled by mobile gambling , and not by bets on PCs or laptops. Gambling Commission data found that between 2015 and the year 2019, there was a drop of 25% in the number of people who had placed a bet on their laptop or PC during the past four weeks. The figures for smartphones during the same period, however, increased from 23 percent to 50%.
It is clear that the most formidable rival to betting shops on the high street nowadays are mobile apps. Every major bookmaker offers the option of both Android and iOS application that has offers frequently delivered via notifications to increase participation. This kind of direct advertising with features like in-play betting can be extremely effective in encouraging people to have some fun. According to the data from 2020, 84% of adults had smartphones, and spent on average 2 hours and 34 minutes using it each day.
The growing trend of betting on live events is another reason betting shops aren’t taking advantage of. Many punters love the ability to make bets during the game, match or race. Mobiles are perfect for this purpose, however in-play betting isn’t possible in a high street betting shop, at the very least not in the traditional manner.
Are there signs of Hope?
Clearly, the change in shopping habits, the reduced profits of FOBTs, and the constant uncertainty caused by Covid implies that the high-street betting shops are not thriving. They remain far from extinct though so it is worthwhile to ask if there’s still hope for them or is their gradual demise simply inevitable?
In the current situation, we are far more inclined to pick either the former option over the latter. While betting shops might not make enough money like they did in their prime but some will still attract enough gamblers over the long run to be viable. Some bookmakers may also think about running a shop at a loss due to the importance of increasing brand recognition and increasing the legitimacy and credibility of the business. A growing interest in brand recognition and in multichannel marketing are the reasons that Deloitte believes that betting stores will continue to exist in large quantities.
There are other evidences to support the view that high street betting shops will not go away in the near future. One persuasive opinion, as stated by Susannah Streeter from Hargreaves Lansdown, is that an appetite to go to betting shops will not go away because of the social aspects of it.
imageHOLDERS, the company that makes gambling kiosks, agreed to this conclusion, saying that chat rooms available online on betting websites cannot substitute for in-person social interactions. They also discovered a crucial benefit in the fact that bookmakers at book shops, unlike online outlets, readily accept cash bets. Although society is becoming more and more cashless (another trend that was accelerated by recent events) however, there is a significant number of people who like to keep notes or coins in their pockets. Furthermore, very few will argue that receiving cash in cash, cold and hard beats seeing it paid into your account online.
Indeed, even in 2020 the cash payment still accounted for 23% of all payments, that’s PS9.3bn in real terms. Even if that percentage decreases, and it will surely do but we’re still talking about billions being paid in cash every year. It would be wrong to assume that some gamblers have a preference for cash simply due to them not being able to keep up with technology.
A few people prefer cash as it keeps them from spending more money than they have. It’s important to mention that this isn’t really an advantage as people in the UK public cannot use credit cards in order to fund bets. Also, there is the fact that cash withdrawals aren’t traceable, making it more suitable for those who are concerned about their online fingerprint.
Survival of the Fittest
It is important to note that we’re talking about how betting businesses will develop in the near future as if the shops only have the option to function the same way they are currently. However, this isn’t necessarily likely to be the case. We have seen it in other industries, innovation may frequently be what keeps high street stores afloat.
In the event that the FOTB stake reduction went into complete force Paddy Power as well as Betfred attempted to work around it by creating new roulette games. In order to ensure that they did not completely violate the rules at Betfred the players had to go to the counter to deposit bets (of as much as PS500) and Paddy Power’s Pick’n’36 game played only once every three minutes. In both cases, the games were stopped after only a short period of time. However they prove that change and innovation are the only constants.
The ability to think Outside the Box
These controversial attempts to evade the new rules is clearly not the right way to go and, in fact, they were rightly criticised in the past. But, what it shows the fact that publishers are willing to think outside of the box at increasing customer engagement. There is no real reason why a bookmaker cannot offer a more palatable idea that will help get customers back into the store. It’s precisely what Ladbrokes Coral attempted to do in the setting up of two ‘concept’ gambling shops within Birmingham at the close of 2019.
Final Conclusion High street shops are closing but They’re Never Out
While we expect the number of high street betting shops to fall over time however, there is enough interest for thousands to remain. There’s plenty of reason for bookmakers to keep their a high street presence as many of their clientele will not, or would rather not, take their business online.
High-street stores can play an essential role in establishing credibility and brand awareness and this aspect cannot be overlooked. It is a fact that shops that begin to provide a more upscale environments are likely to have a better chance of avoiding the fate of. External factors, like shifting demographics and varying rents, will certainly contribute to the overall picture, but , in general, the best shops will not be leaving our streets for a long while in the near future.
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