Online gambling still thriving during credit crunch

Ernst and Young survey suggests a bright future

Inspiring reading this weekend included a piece in the Birmingham Post quoting from an Ernst and Young survey which found that online gambling remains one of the brighter spots in the e-commerce and gambling sectors.

Author Tom Scotney said the economic downturn was bringing challenges to the sector, but innovation in online gambling was still bringing in money.

He quoted Jim Bowden, senior manager in Ernst & Young UK's betting and gaming team, who said: "A reduction in consumer confidence and disposable income has resulted in many global markets seeing a decrease in gaming revenues. Additionally, the tightening of the credit markets caused the deferral of major projects at destination gaming resorts.

"Operators around the world are studying very closely every aspect of their business models to ensure they are providing customers the services they demand."

The study revealed that online gaming has seen robust trading, with many operators in the bingo and lottery markets expanding their online presence, says Bowden.

"Online games provide a form of escapism for people during the difficult times and the potential audience is huge - anyone who has an internet connection," he added.

"The past year has seen continued growth and innovation in this area. Online games are a fun, cost effective alternative to other leisure activities during an economic downturn."

The Ernst and Young report found that some casinos have weathered the recession better than others. Domestic gambling sites around the world were affected less than tourist gambling spots because people had been cutting down on air travel.

And some operators have introduced new forms of gambling that have yet to face a recession.

In the UK, the growth of Fixed-Odds Betting Terminals (FOBTs) continues to be a major area of focus for bookmakers, the study found, confirming Gambling Commission numbers.

Many bookmakers said that revenue generated from FOBTs now exceeds traditional over-the-counter gambling.

The land bingo industry, like the pub industry, was hit badly by the smoking ban imposed in the UK. The report said that this was a particular challenge since operators earn the most lucrative returns from gaming machines in the intervals between games, when most smokers go outside for a break.

The report said the industry over the coming months would be a matter of ‘survival of the fittest', concluding: "Given that many operators in the industry have already taken steps to reduce costs to align themselves to the new regulatory environment, they could be well placed to emerge stronger as the upturn comes, according to the study."

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