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03
Dec
2013

Gambling: What is the Future for Mobile?

POSTED BY Analyst Team
Keeping track of changes in the remote gambling industry is no easy task – the market is at markedly different stages in different regions, countries, or even states; where legislation is being introduced or changed the processes seem never ending and it can be difficult to get a hold on what stage this legislation is even at. However, most of the biggest changes are widely reported on, and (thankfully) fairly straightforward to get a grip on. Perhaps one of the biggest changes, which will affect many household names such as William Hill, Ladbrokes and Coral, is the UK’s Gaming (Licensing and Advertising) Bill, which is expected to come into effect in May 2014. The law, which is about to be passed on to the House of Lords, will require all UK-facing gambling companies to hold a UK Gambling Commission license. At present, many companies hold licenses in UK overseas territories, such as Gibraltar, the Isle of Man and Alderney, but not within the UK itself. The change will also require all UK online gambling companies to pay a ‘point of consumption tax’ (as opposed to at the point of supply), which would be 15% of their gross gaming revenue (for those currently registered in Gibraltar, they must pay 1% of gaming yield, or gross profit, in tax). Given this stark increase in the amount gambling operators will taxed next year, some companies are already seeking to make their operations leaner: An article in the Gibraltar Chronicle detailed that William Hill was to make redundancies in its legacy telephone betting service, as its users are increasingly opting to bet electronically. Juniper’s report out today echoed this fact, and highlighted that many companies are expecting to see over half of their online revenues from mobile in the next 1-3 years. At present, one of the market leaders, Paddy Power sees 47% of its total online revenues from mobile, and in October 2013, the company reported that 63% of its online customers transacted via the mobile channel. These changes to legislation in the UK are a drop in the ocean, however, compared to changes which have occurred in the US market. This has been a market which Juniper has long realised the potential of, and is getting excited about as these developments come to fruition. Just last month, online gambling in New Jersey went live, with some operators reporting more than a thousand simultaneous players on their sites. A deep-routed hunger for mobile content and apps already exists in the North American market – free-to-play gambling-style apps such as Slotomania and Big Fish Casino are established names in the US App Store’s Top Grossing charts. Given the shift that many European gambling operators are currently undergoing – from online-first to mobile-first gambling operators – it would be wise for operators in New Jersey (or Delaware and Nevada, where certain types of remote gambling are also permitted) to launch as a mobile-first company, anticipating the huge mobile growth expected in this region to 2018. There will of course remain challenges – certain app stores do not permit gambling apps, and regulation in particular countries is not always clear. But on the whole the future for the mobile gambling industry remains bright, and conducive to an additional 100 million mobile gambling users by 2018.