A report from British market research firm IHS has confirmed what most people already knew—that mobile gambling is an already significant portion of betting revenue and is growing in popularity as powerful smartphones and tablet devices increase their market penetration. In the United Kingdom, mobile gambling revenue more than doubled in 2010.
Net mobile gambling revenue in the United Kingdom in 2010 rose to £41 million, up from £19 million in 2009. According to the British gambling oversight body, the UK Gambling Commission, the percentage of the population who wagered via a remote mechanism–defined as wagering via a communications medium such as the Internet, a telephone or the television– equaled a record high of 13.7 percent in the fourth quarter of 2010, up from 9.8 percent four years earlier in the first quarter of 2007.
The success of online gambling in the UK marketplace should serve as a blueprint for American regulatory authorities and underscores the significant boost to the economy that it would provide. In Great Britain, the growth in mobile wagering is being attributed to a confluence of factors not the least significant of which is a greater confidence in the brands that provide the service. Ronan De Renesse, senior analyst, head of mobile, at IHS(which commissioned the study) noted:
“The full implementation of the 2005 U.K. Gambling Act in 2007 helped change the public perception of mobile gambling by allowing online betting sites to advertise their services on television and radio for the first time. During the past 12 months, there has been a rapid increase in advertising spending from mobile gambling operators and other wagering operations to promote their services. Partly because of this, the opinion of gambling has changed in the country. No longer does gambling conjure an image of a smoky betting shop hidden from the public. Instead, betting has crafted itself into a respectable enterprise by using ad campaigns featuring the endorsements of sports pundits.”
Several UK betting organizations including Paddy Power, Betfair and Ladbrokes have undertaken initiatives specifically targeting smartphone users. Blue Square, a brand of the powerhouse U.K. gambling conglomerate Rank Group, said that 20 percent of its revenue came from mobile gambling in 2010 representing a 300% increase from the previous year.
Another component in the growth of mobile gambling revenue is technology innovation and improvements in smartphones and tablet devices such as the iPad. The fact that on balance the UK is behind the United States in terms of adoption of high speed 4G networks demonstrates the potential gold mine mobile gambling could represent in America as well as the room for further growth throughout Europe. IHS’s De Renesse observed:
“Today’s mobile gambler is very different from the mobile gambler five years ago/Previously, aesthetics and speed were sacrificed for accessibility over a variety of devices. Today, consumers want a quick, good-looking application that provides additional content and allows them to place bets, spin a roulette wheel or buy a bingo ticket with the same level of ease that they currently can find online. As a result, a new wave of speedy, glamorous mobile gambling applications is emerging, which can be promoted in the wider media with ease. IHS expects this trend to continue.”
While in many industries greater mobile revenues have been seen as cannibalizing more traditional online streams that doesn’t appear to be the case with the gambling business. . To the contrary, mobile gambling is expected to increase an online user’s average revenue per user (ARPU) by 10 percent to 20 percent during the next couple of years.
The online gambling business in the United States is obviously well behind the rest of the world due to draconian Federal regulation, but its becoming increasingly prevalent in Nevada. The Leroy’s Sportsbook chain (now owned by UK giant William Hill) has released a sports wagering platform for Blackberry and Android based phones. With William Hill and Cantor Gaming on a technological collision course in the Silver State, there’s every reason to expect more mobile gambling options in the next few years.
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