Walking down almost any high street in the UK today is a walk that inevitably goes past empty buildings and fading shop fronts, with many major chain retailers and independents alike having closed their doors in recent years. The UK high street has been struggling for some time – high rents, crippling business rates and rising taxes have made operating a physical retail outlet financially unviable for many. On top of that, people are choosing to do more of their shopping online. Around 38% of consumers in the UK go online at least once a week to make a purchase, making us the most prolific online shoppers in Europe. With more people spending money online rather than visiting the high street, town centre retail outlets are simply not turning profits.
Retailers are not the only sector to have some or all of their business move online. The gaming and gambling sector has experienced a huge boom in terms of overall revenue since online services became available. Online gambling is another area in which UK consumers are leading the way – in the 2018/2019 tax year, remote gambling comprised more than a third of the total revenue for the industry, generating approximately £5.3 billion.
In 2020, retailers and gambling venues across the UK were ordered to close their doors for several months as part of the response to the coronavirus pandemic, while people were told to stay at home as much as possible. This naturally saw many turning more frequently than ever before to online activities. Online casinos saw a surge in popularity as people in lockdown looked for ways to pass the time. Search interest in online casinos hit an all-time high at the peak of lockdown, with people looking for slots sites, card games, virtual sports to bet on and other distractions. The question brick and mortar casinos and bookmakers will now be asking is whether customers will go back to visiting these venues as restrictions are lifted, or will they continue to enjoy the convenience of playing online?
In the early days of home internet access and online gambling, there was evidence to suggest that people would stop visiting physical venues and instead stay at home and access their favourite games online. London saw many long-established bingo halls close down due to lack of custom in the early 2000s and beyond, with customers preferring the ease and simplicity of accessing games online. However, several more recent studies have shown that online casinos complement land-based casinos rather than cannibalising revenue.
People who like to gamble often fall into two distinct camps – those that like to be able to access the games 24/7 from wherever they are at their own convenience, and those that prefer to make an event of it with a trip to the casino, race-track or other venue. While there is a modest amount of crossover between the two groups, online and land-based gamblers are in the main two different consumer groups. On top of this, online casinos can act as a gateway for people to try the games before committing to physically heading out to play. Once people have tried the games online and they know they enjoy them, they feel more confident about planning a night out at the real-life casino.
The lockdown measures that forced casinos and bookmakers across the UK to close for several months in 2020 were criticised by the British Gambling Council for excluding gambling premises from several areas of government financial assistance. While businesses in the hospitality, retail and leisure industries were eligible for a 12-month tax relief on business rates, casinos and gambling clubs were exempt from this. Retail betting shops were also exempt as the government classed them as financial services rather than leisure. However, the BGC was positive about measures taken to protect employee wages, which would have been almost impossible for the businesses to cover. With live sporting events also cancelled during the lockdown period, bookmakers and casinos with sportsbooks would have taken a huge hit in revenue even had their doors remained open.
The retail gambling sector in the UK was still reeling at the start of lockdown from regulations imposed in 2019. Designed to help tackle the problem gambling epidemic in the UK, the new laws reduced the amount customers are allowed to gamble on fixed odds betting machines from £100 to just £2. Almost a thousand betting shops across the UK closed in the six months after the new legislation came into effect, representing a closure rate of approximately four per day, and with almost another thousand earmarked for closure by 2021.
The evidence so far suggests that real-world casinos will continue to draw in customers even as more people play online, as there will always be the demographic that prefers the thrill of a real-life venue. Bookmakers may suffer more as people prefer the convenience of placing bets online – although most major UK bookmakers have both online and retail services, we may see more venue closures over the coming months if people stick to betting online. If high street bookmakers close as people place their bets from home or from mobiles, that equates to less foot traffic in town centres, which could then contribute to the downfall of more retail outlets and even more disruption on the high street.