How might the cost of living crisis affect the UK gambling industry?

 

The cost of living is rising and has continued to rise since 2021. In April 2022, inflation reached an all-time high. It is expected to reach nearly 9% in the fourth quarter of 2022. Rising energy prices rose more than 94 percent in Korea and more than 54 percent in domestic energy. This, coupled with rising demand for consumer goods and supply chain bottlenecks, is causing enormous problems for British households. In practice, this caused the average wage to fall at its fastest rate for more than 20 years.

According to the National Statistical Office, more than three-quarters of adults are worried about their living expenses, with 41% of respondents spending less on necessities such as food and shopping. It is not just the energy and everyday needs that consumers are cutting back on spending. A recent YouGov poll shows more about how Britons are responding to soaring prices, especially the entertainment in the hardest-hit areas such as subscriptions and dining out.

Spending on entertainment has decreased, but how about gambling?

In this phase of price increases, it is reasonable to question how the subsistence crisis will affect gambling, and we already have some statistics to refer to. Health, wealth, and

The Center for Economic and Corporate Research's Happiness Index said a quarter of gamblers have increased their gambling spending over the past year, and people under the age of 35 are likely to spend more. Of the UK's adult population, less than a third (32%) participated in gambling, and 23% have increased their habits over the past year. However, the report details that high-income adults are more likely to gamble and have increased their spending.

Conversely, players have reported a more recent decline in gambling participation, which means 32 percent of 700 active gamblers said they will spend less on gambling in the coming months. However, since the survey recorded only 700 responses from participants, it is not large enough to be considered representative of the British population.

According to the total betting and game returns announced by the British government, the annual figures for 2021-2022 showed a total increase of 8.4% year-on-year, reflecting the increase in spending. However, if this is further subdivided, the gross gambling return (GGY) in March 2022 is not so rosy as the gross gambling return, which is 10.4% lower than in February 2022.

Online slot sales showed strong growth with an increase of 14.6% and proved to be a solid market. Online slots remain the most popular form of online gambling and entertainment with a variety of new monthly games and strong market competition, making the gambling area less likely to undergo major changes. Furthermore, according to industry analysis, it was the betting industry and promotional events related to the Cheltenham Festival, not the online casino game revenue that caused the GGY to fall.

What can you make out of this data? Some sources say participation in gambling has decreased, while others say spending by high-income earners has increased. This does not mean that gambling will not be affected by a decrease in player budgets, but that potential decline is not consistent with current data (perhaps because revenue figures from the pandemic generate unfair year comparisons or lack participation and participation expenditure figures). Conditions). One thing for sure, entertainment is one of the first areas of spending reduction, as the British tighten their belts, and we are already seeing reports of other gambling practices.

Will the crisis increase the gambling problem?

Whether gambling is increasing or gamblers are cutting spending in response to the crisis, it is not so hard to imagine that dependence on gambling in times of economic hardship or the consequences of gambling can cause more problems.

According to academic research conducted after the 2008 recession, this is not true. One study recorded Iceland's gambling participation rate in 2007 before the financial crisis and later in 2011. The results showed a significant increase in gambling participation, with more people playing lottery, bingo, and scratch cards. Meanwhile, the use of electronic game consoles such as slots has decreased slightly. In practice, the prevalence rate of 1.2% in 2007 and 1.1% in 2011 did not increase statistically. In addition, those who reported economic difficulties were more likely to participate in the lottery than those who did not.

Can the gambling industry stop the recession?

The gambling industry has long been seen as enduring a recession. But UK inflation is at its highest level since 1982, a mix of supply chain bottlenecks and soaring energy prices exacerbated by Ukraine's war has created unprecedented conditions for continued spending cuts across many sectors, particularly entertainment.

We're already seeing some changes in player and revenue data, but it's not a definitive picture. In the coming months, it will certainly be interesting to look more closely at the statistics as statistical records and new revenue figures emerge. In addition, the rise in living costs comes at a time when Britain is under legislative gambling review introducing mandatory per-player budgets and pay-ability checks, which will affect the way players gamble and spend.

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