A presentation by Alun Bowden, Senior Vice President of Strategic Insight at Eilers & Krejcik Gaming, on the state of the UK gaming market, encompassing casinos and casino sites in 2024, has provided an overview of the market dynamics, highlighting the challenges faced by operators, and the growth of the gaming segment.

The UK gaming market is undergoing significant changes due to regulatory pressures and shifting consumer behaviour. There are, however, opportunities for smaller firms to compete and for operators to adapt to the new landscape by prioritising safer gambling practices.

Bowden discussed various trends and challenges facing the industry, including the impact of regulatory changes. He noted that regulation is driving the market, and that the industry is now largely in the hands of the regulatory bodies. 

Bowden did not rule out that there will be further changes and adaptations needed to comply with regulations. 

Soaring data costs were also mentioned, particularly in racing and football, and that this is unsustainable for many operators. He also identified Sports betting trends and discussed the growth of micro-betting, back trackers, and live game shows as popular trends in sports betting. 

A look at casino trends included the popularity of daily jackpots and bonuses, live game shows, and extreme volatility slots, but Bowden also mentioned that operators are wary of big prizes due to regulatory concerns. 

One of the most interesting changes relating to slots and affecting slots players around the UK is the trend of decreasing the RTP (return to player) around the UK. 

RTP is a percentage used for every slot that indicated the percentage return. So, for example, a slot with an RTP of 95% will over overage return £95 for a player that places 100 £1 bets. 

Operators have been utilising slots with a decreased RTP to try an alleviate for declining player values.  

Bowden said that there were several challenges facing the industry, including a mature market, low growth rates, and increasing competition from grey markets. He said that there is a lot to do for attracting Gen Z players. 

Many operators are struggling to attract younger players, who prefer different products and experiences from those their dads have used for generations, added Bowden.

He predicts that horse racing may decline to a Tier 2 or Tier 3 sport in the UK within the next 5-10 years due to declining interest among younger generations. 

There was discussion on the uniqueness of the UK market and how it differs from other regulated gambling markets, particularly in terms of its low value, mass market, and unique products. He also mentioned that the industry is still massive and there's a lot of money yet to be made. 

Overall, Bowden provided an insightful analysis of the current state of the online gambling industry in the UK and highlighted some of the key challenges and trends facing operators in this market. 

Here are some key points from the presentation:

1. The UK gaming market has been declining due to affordability changes and regulatory pressures, with many operators experiencing a decline in VIP players and revenue. 

2. The gaming segment has been driving growth, with online gaming growing at a rate of 6-7% in the first quarter of 2024. 

3. Kindred, a UK-based operator, reported 20% growth in the first quarter, suggesting that some operators are adapting to the changing market dynamics. 

4. The Commission's data shows that online gaming is driving market growth, while sports betting remains flat. 

5. The average return to player (RTP) on slots has decreased indicating that operators are taking a higher margin to compensate for declining player values.

6. There is a risk of regulatory pressure from the growth of gaming, particularly around safer gambling concerns. 

7. The new government and gambling minister may introduce new regulations or tighten existing ones, making it essential for operators to prioritize safer gambling practices. 

8. Flutter Entertainment, a UK-based operator, dominates the UK market, and it's difficult to see a viable competitor emerging at scale. 

9. Smaller firms are taking share outside of Tier 1 operators, and the drop in average revenue per user has created more pressure on reducing acquisition costs and increasing competition.