“The death of the British high street” is a phrase that has been used frequently by national news outlets. In recent years there has been an increase in businesses that have run into financial difficulties or being forced to shut down for good. It is in large part a consequence of the growth of online shopping but other factors like rising costs and inadequate infrastructure are also to be blamed. Despite the uncertain situation the majority of high-street shops have found themselves in today, many believe that they can overcome the challenges faced.
So far, we have talked about high street stores in general terms, but what we are most interested is betting outlets. A lot of people who are against betting have criticized the large numbers of betting shops on the typical British main street. But, do they continue to feel this way in the event that retail shops are abandoned? The bookmaker might not have the same appeal like artisan bakers, or a boutique clothes shop however, given some of the issues of the contemporary high street, if the bookshops were gone, more than likely, the shops would be completely empty. That would mean no rental for property owners and no tax revenue for government and councils and no jobs for the residents of the area.
Are book shops still an impact in our town centres or is it only one more step before they take all their business online? If you frequently visit your local bookie to place bets, the thought of the bookies disappearing forever is perhaps a troubling one. While it’s impossible to predict how the next few years will unfold, by looking at the current trends and information that we can make an informed forecast of the future of betting shops.
Fixed-Odds Bets Terminal Changes
Although we typically talk about retail stores as a homogenous group however, each industry has its own specific challenges. The growth of Amazon for instance posed the greatest threat to stores than the local grocery store (for the moment, at least even though Amazon has plans for nearly every aspect of retail! ).
Sometimes the threat comes from competition . However, in some cases, it comes through legislation from the government as bookmakers found out. In the year 2019 it was the UK government decided to cut the maximum amount of bets on Fixed-odds gambling terminals (FOBT) from PS100 and down to PS2. This was an extremely significant change , not only in terms of responsible gambling but also due to FOBTs being responsible for PS1.7bn of bookmakers that are high-street’ PS3.2bn annual revenue – which is a significant portion.
The culture minister Jeremy Wright praised the move as an “significant improvement in the protection of vulnerable individuals” however, it could be a significant challenge for bookmakers across the nation. A report that was published in 2018 by the Association of British Bookmakers, predicted that the change to FOBTs would result in the closure of 4,500 gambling shops (approximately 50%). It’s important to mention this report, written by the accountancy firm KPMG which was later criticized by many as exaggerating the risks. Even Paddy Power declared that although the PS2 stake limit could have “some influence” for betting establishments However, it was “far more benign” than what the AAB depicted. Their view was echoed by Matt Zarb-Cousinwho spoke in behalf of organization Fairer Gambling.
When groups debated over the precise impact of the proposed FOBTs regulation could have on betting shops, it was clear that they will affect betting shops in some degree. For one thing, FOBTs had always been an income source for many bookies on the high street. The new rule came into full effect on 1st April 2019 and, a month later, machine revenue had decreased by around 40%. The main issue was, and continues to be for bookmakers, that punters were spending less money overall rather than simply using it in other places in the shop.
Some bookies noted there was little or no growth in online bets while other bookies only had a small growth of 10 percent. Over a year later in the month of October, 2020 GVC (Ladbrokes & Coral) stated that revenue from machines fell 36%, whereas betting revenue was up just 7 percent.
Prior to the change in rules, FOBTs comprised 57% of the money that betting shops take-homes, a rise from 38 percent in 2008/09. This means a large amount of revenue. Paddy Power estimated that its annual losses could range between PS36m to PS47m in direct consequence of the actions of the government. Despite this, the Irish bookmaker stayed largely defiant saying that they didn’t expect to have to close any of their stores. They were the only one in this regard, despite all of their competitors distinctly less optimistic in their predictions. In the end, for a lot of individual shops that were affected by the new FOBT regulation made the distinction between running at a net win and running at a loss.
A Decline is beginning
After reading the article above, it should come as not a surprise that numerous bookmakers on the high streets had to shut, in part due to the recent FOTB legislation. In October of 2020 the Mirror published an exclusive piece in The Mirror revealed that 460 bookmakers in the high street had been shut from the end of previous year. This represented a 12.2 percent decrease by the quantity of high street shops.
For all areas, including areas that are not near the high street, the decrease was at 11.3%. While this isn’t a huge number, it is much lower than what many thought. In fact, GVC (owners of Ladbrokes and Coral) has only managed to closing half of the stores they had planned to close by March 2020.
The Coronavirus Challenge
Changes to FOBTs have undoubtedly been the driving force behind closing of high-street betting shops. Even before the coronavirus epidemic caused the nation to come to a standstill, many shops had already closed or were on the verge of closing. Still, it would be false to say that the difficulties of Covid-19 did not have an impact on the business. In the short-term it was a decline in returns as sporting events were no longer running and the long-term impact is that more high-street betting stores could shut down.
In August 2020, William Hill made the decision not to reopen 119 high-street stores temporarily closed because of the coronavirus lockdown. When they announced the decision, they stated that they anticipated “that longer term retail footfall will not return to levels pre-COVID”. While William Hill were alone in making such a choice, their predictions regarding footfall may be accurate. A lot of gamblers who had to go online after their local stores shut down, might not go back to the ways they used to.
Like other industries as well, the current situation triggered by the pandemic may serve to accelerate the transition towards online gaming. Customers that had never tried betting online could have come across its ease of use. In addition, fans of FOBTs will have found that whilst stakes in stores are only PS2 on the internet at present, they can wager far more and also choose from a broader selection of games.
Punters Increasing Betting Online
Lockdown meant that there was no option of betting in-store at their high-street shop The only alternative was online betting. Because of the absence of sporting events, this usually meant betting on games such as virtual sports, or casino games like roulette or slots, rather than on actual sporting events.
Mobile Betting
This rise in popularity is due to mobile gambling , and not by bets on laptops or computers. Gambling Commission data found that between 2015 and 2019, there was a decrease of 25% in the number of gamblers who placed bets on their laptop or PC within the last four weeks. The figures for smartphones during the time period was however up from 23 percentage to 50%.
Evidently, the most significant rival to high street betting shops nowadays are mobile apps. Each major bookmaker today provides the option of both Android and iOS app with offers regularly made available via email to maximize the amount of engagement. This kind of direct advertising with features like in-play betting could do wonders in encouraging people to have a flutter. After all, according to information from 2020, 84% of adults were using smartphones, and they spent two hours and 34 minutes using the device every day.
The push towards in-play betting is a further reason why betting shops aren’t getting. Many punters like the option to place bets on an event, match, or race. Mobiles are perfect for this but in-play betting isn’t available in a traditional betting shop, at least in the traditional fashion.
Do you see signs of Hope?
The combination of shifting shopping practices, the less lucrative returns of FOBTs and the constant uncertainty caused by Covid implies that the high-street betting stores aren’t thriving. They’re not completely extinct but it’s worthwhile to ask if there’s still hope for them or is their slow decline an inevitable event?
In the current situation currently, we’re much more likely to select the former over the latter. Sure, betting shops might not bring in the same amount of money as they did back in the day, however, some still draw enough players over time that they can be considered viable. Some bookmakers may even contemplate running their stores at a loss due to the importance of increasing the visibility of their brand and enhancing the legitimacy and credibility of the business. The recognition of brands and the interest in multichannel marketing are two reasons that Deloitte believes that betting stores will continue to survive in substantial amounts.
There are other arguments supporting the idea that high-street betting shops won’t disappear anytime soon. One convincing view, stated by Susannah Streeter from Hargreaves Lansdown, is that an appetite to patronize betting shops will persist due to the social component of it.
imageHOLDERS, which manufacture gambling kiosks, also agreed on this issue, stating that chat rooms online on betting sites aren’t able to substitute in-person social interactions. They also identified a significant benefit of bookmakers in shops like online shops readily accept cash bets. Although society is increasing cashless (another trend that has been accelerated by recent events) However, there’s a significant number of people who prefer to have notes or coins in their pockets. Additionally, not many would argue that receiving cash in cold, hard cash beats seeing it paid to your bank account online.
In 2020, for instance, cash payments still represented 23% of all payments, or PS9.3bn in real terms. Even if that percentage declines, as it is bound to do, we are still talking about billions being transferred in cash every year. It’s not correct to think that some punters have a preference for cash solely due to their inability to keep pace with technological advancements.
Some people prefer cash because it prevents them paying more than they have. It’s important to mention that this isn’t as much of an advantage as people who belong to the UK public are not able to use credit cards in order to fund bets. Also, there is the fact that cash transactions are not traceable and therefore more secure for people who are in their online footprint.
The Survival of the Fittest
It is important to note that we’re talking about what the future holds for betting stores as though the shops only have the option to operate in the same manner they do now. However, this isn’t necessarily going to be the scenario. As we’ve seen in other sectors, innovation could often be what keeps the high-street stores going.
As the FOTB stake reduction went into fully force Paddy Power and Betfred sought to wriggle their way around it by creating new roulette-style games. In order to ensure that they did not in any way violate the rules at Betfred customers had to visit the counter to deposit wagers (of at least PS500) and Paddy Power’s Pick’n’36 game was only played every three minutes. Both games were pulled after a brief period of time. However, they are evidence that innovation and change will always be the mainstays.
Looking Outside the Box
These controversial attempts to bypass the new rules are obviously not the ideal solution and, in fact, they were heavily criticized in the past. What it does show the fact that publishers are willing to think a little outside the box to increase customer engagement. There is no real reason to think that a bookmaker can’t come up with a much less controversial concept that can help bring customers back to the shops. That’s exactly the way Ladbrokes Coral attempted to do by establishing two ‘concept’ gambling shops within Birmingham toward the end of 2019.
Final Conclusion High Street Shops Down But Never Out
While we anticipate the number of high-street betting shops near me to fall in the future, there is still enough demand to keep thousands. There’s plenty of motivation for bookmakers to keep their having a presence on the high streets as many of their clientele prefer not to, or rather not, take their business online.
The high street stores also play a significant part in establishing credibility and brand awareness and this aspect must not be neglected. The shops that begin to offer a higher-quality surroundings are more likely to have a better chance of avoiding being snubbed. External factors, like shifting demographics and varying rents, will certainly contribute to the overall picture, but in general, the most reputable stores will not leave our main streets for long in the near future.
Menu