Gambling to some, big business to others – A look at the Cheltenham Festival
In the latter part of November 2016, the UK Gambling Commission published a report that said that online gambling is now a sector to be reckoned with as it has surpassed local gambling where betters can place their wager in person. Statistics for the year between April 2015 and March 2016 saw a GGY (Gross Gambling Yield) that amounted to £4.5 billion. This is one-third the total market share, but when you look at just how many ways in which to place bets there are, that’s really a sizeable portion of the entire market.
Why online gambling is exploding
When breaking the gambling industry down by sector, the one thing you need to look at is how the GGY is calculated. First, keep in mind that online casinos and other types of gambling sites have a much lower overhead than brick-and-mortar casinos and high street shops. So when you consider that the Gross Gambling Yield is the total amount being wagered minus the paid out winnings, you can see that online gambling sites also make a great deal more profit since they are paying out less on overhead.
If an online betting site makes £10 million and a high street shop makes the same amount, obviously the high street shop will net a lesser amount because they are paying out more to stay in business. Unfortunately, it is only a very recent development in being able to actually track those online wagers, so the figures are still coming in. In any event, some see it simply as one of the favourite pastimes of Britons, gambling, whilst those who run the sites see it as it is, big business and very, very big business at that.
Breakdown by sector
Anyone who is considering opening an online gambling site might also want to look at the breakdown by sectors. The total GGY for online gambling mentioned above was £4.5 million divided between a number of sectors which includes:
- Online Casino Games – £2.5 billion
- Sports Betting – £2 billion
- Online Slot Machines – £1.8 billion
- Betting Exchanges – £152 million
- Bingo – £153 million
- Pool Betting – £26 million
When looking at those figures, you can see that sports betting is a huge portion of the market, almost half of the total GGY and why it’s important to look at the part the Cheltenham Festival plays in all that. With so many Paddy Power horse racing bets being taken online throughout the festival and beyond, horseracing is proving to be the largest portion of the sports betting sector and only direct football wagers come close. If there’s anything the Irish like almost as much as their whiskey it would be horseracing, and that’s why Paddy Power is such a huge portion of the online sports betting sector.
Cheltenham Festival generates a huge portion of the total sports betting GGY
Not only does an event like the Cheltenham Festival generate a huge portion of the sports betting GGY but also for the local area of Gloucestershire. This year alone the region benefited to the tune of over £100 million pumped into the local economy, and believe it or not, a good portion of that was pumped back into the festival as locals placed their bets with bookmakers as well. With over one-quarter of a million people in attendance, you can only imagine how much they are spending during the days in the area and horseracing fans come from literally all over the globe for this one event.
Sports betting may be a significant portion of the GGY for the entire industry but Cheltenham Festival is also responsible for a huge portion of that total amount. With online wagers being a relatively new industry, more and more bookmakers are joining the ranks and it is just possible that the £4.5 billion figure will double within the coming decade.
