World Cup betting: what do the odds look like for bookmakers? - Hospitality and Leisure Betting & Gaming
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Hospitality and Leisure Betting & Gaming World Cup betting: what do the odds look like for bookmakers? May 2010 pwc
Bookmakers have had a tough time of
late. The chief executive of William Hill
went as far as describing 2009 as “hellish
for bookmakers”. The recession has
had a major impact on overall business.
Those economic problems have been
compounded by volatile sporting results
that have also hit bookmakers’ margins.
Even the unexpectedly severe winter
weather in the UK has played its part, with
many events cancelled. With revenues and
profits down in 2009 and a tough 2010
expected, the World Cup in South Africa
may be a singularly bright light at the end
of a dark tunnel.
2 PricewaterhouseCoopers LLP
This World Cup will arguably have landscape in those countries. In
more far reaching impacts than the addition, the growth of live betting is a
tournaments in 2006 and 2002. That’s phenomenon that is new for the World
because the betting landscape has Cup, having been in its infancy in 2006,
changed dramatically since then. While and one that might drive significant
the UK may have had established growth ahead of what was seen last time.
licensed bookmakers, both offline and
online, for many years, this time round
will see the emergence of a new online History repeats itself
market in France, following the recent
regulatory changes which have led to Historical betting patterns show that the
the opening up of this market, and the World Cup traditionally provides a major
first World Cup tournament Italy’s still boost to all bookmakers in the order
developing sports betting industry has of between one and two per cent of
seen. The World Cup 2010 will be a annual gross win (worth c.£17-18m for
key event in shaping the competitive Ladbrokes or William Hill) [See Chart 1].
Chart 1: Boost from World Cup 2006
Impact of World Cup 2006 in Germany
20
20
Bookmaker gross win due
15
15
to World Cup, £m
10
10
55
00
Ladbrokes William Hill Ladbrokes e-gaming
Source: Ladbrokes 2006 Annual Report; William Hill interim management statement August 2006
World Cup betting: what do the odds look like for bookmakers? 1
Research by PwC suggests that this Perhaps even more importantly,
time will be no exception. Our consumer the one-off influx of new customers
survey of over 2,000 UK consumers represents an opportunity for
reveals that 7% of the population who bookmakers to attract a new type of
don’t normally bet are likely to do punter, who could develop into a regular
so during the World Cup [See Chart punter in the future. The majority of
2a]. Although this may not sound like regular punters are male and slightly
much, this compares to only 8% of the skewed towards an older demographic.
However, as the chart below shows,
population who say they bet regularly,
a higher proportion of new customers
and of these, 3% are people who don’t
betting on the World Cup will be female
expect to bet on the World Cup – so the
and younger than regular betting
7% figure could double the number of customers.
customers for the bookmakers during
the World Cup.
Chart 2a: Consumer attitudes to betting?
New betting customers for the World Cup 2010
25
0.25
20
0.20
% of respondents
15
0.15
10
0.10
0.055
0.000
I bet regularly I don't bet regularly but Consumers betting
will do so on the World Cup at least once per year
Source: PwC consumer research March 2010; UK Gambling prevalence survey 2007,
National Centre for Social Research
Chart 2b: World Cup Betting – demographics of new punters
10 16
18
30
55+
% of respondents
27
35
35-54
90
18-34
70
57
47 Female
Male
Regular New punters Regular New punters
punters betting betting on punters betting betting on
on World Cup World Cup on World Cup World Cup
Source: PwC consumer research March 2010; UK Gambling prevalence survey 2007,
National Centre for Social Research
2 PricewaterhouseCoopers LLP
The venues for placing those bets are available to bookmakers in 2010 that
likely to show a strong shift to online were only developing or non-existent for
channels. More than half (55%) of those previous competitions. France and Italy,
consumers saying that they will place in particular, will be key new markets to
a bet on the World Cup will do so via address. Another major change this time
a website. around is the change in the nature of
That high propensity to bet online is the bets placed. ‘In-play’ or live betting
one of several trends that will present is a rapidly growing element of betting,
the betting industry with a number of and creates potentially new markets
new opportunities during the World for bookmakers – particularly targeting
Cup that could help lift the gloom of customers watching the game at home
the recent difficult trading environment. on television where they are also likely
There will be new European markets to have easy access to the web.
Chart 3: the move online
Betting online during the World Cup
%
60
60
Proportion of betting online
50
40
40
30
30
20
20
10
10
00
Share of overall betting Proportion betting on World Cup
market online planning to do so online
Source: GBGC, PwC consumer survey March 2010
A higher proportion of new customers betting
on the World Cup will be female and younger
than regular betting customers.
World Cup betting: what do the odds look like for bookmakers? 3
New markets emerging: See Table 1 adjacent for a summary.
Given the market presence and profile
France of the state incumbents, it seems likely
that they will garner a major share of
The French market is at the point of
the revenues that are available from the
being liberalised – and just in time
World Cup. But other players have a
for the World Cup. How effective
chance to establish themselves quickly
bookmakers are at acquiring customers
as the World Cup focuses attention on
during the competition will be a key
their services. One thing is for sure,
determinant of their future success.
the World Cup will be important in
All eyes will be on how the new entrants
determining who comes out on top in
perform relative to the old state
the end.
monopolies, PMU and Française
des Jeux.
Italy
Rather than individual businesses trying
The Italian market is relatively immature
to take those established players on
with liberalisation of the high street
head-to-head, recent months have seen
and online betting market only taking
numerous partnerships announced
place over the last couple of years.
between media, telecoms and gaming
And after initial explosive growth, the
companies as each struggles to plug
betting market has recently started to
the gaps in the capabilities needed
show signs of slowing down. The World
to be ready for the market ahead of
Cup therefore provides an opportunity
liberalisation. Gaming companies have
for bookmakers to re-energise their
sought partnerships with telecoms
markets and kick start growth. Again,
service providers or media companies
they need to attract new types of
in order to access their large customer
non-traditional consumers and grow
bases. The state gambling monopolies
their consumer pool beyond their core
have sought both media partnerships
market of enthusiastic early adopters.
and access to more advanced
technology from gaming companies.
Diagram 1: Alliances to plug capabilities in France
Media/Telecoms
companies
Orange
Customer reach in France
SFR
State lottery and
Canal+ betting monopolies
L’Equipe PMU
FdJ
Of f shore online
gaming operators
Casinos Tranchant
JOA Casino Bwin Sportingbet
Of f line gaming companies
Ladbrokes PartyGaming
Betfair Partouche 888.com
Online gaming experience
Source: PwC Analysis
4 PricewaterhouseCoopers LLP
Table 1: Alliances announced in France
Company 1 Company 2 Comment
PMU Party Gaming, Announced in March 2010, PartyGaming will
Paddy Power provide PMU with access to its poker platform
and network. Irish bookmaker, Paddypower, will
provide PMU’s sports betting platform
bwin L’Equipe Bwin has formed a joint venture with the French
sports magazine to offer online gaming products
FdJ RTL, Orange, FdJ has signed an agreement with the sports
Yahoo! broadcasters RTL, Orange and Yahoo! to offer
its bets to customers of the three large media/
telecoms companies
Ladbrokes Canal+ Canal+ is one of France’s largest sports
broadcasters while Ladbrokes brings extensive
online gaming expertise from the UK market
Iliad Chiligaming/ Chiligaming, which licences its technology
Playtech from B2B giant Playtech, has an agreement to
distribute online gaming products through Free
(owned by Iliad)- one of France’s largest internet
service providers
In play betting, now! 80% of consumers planning to watch
World Cup games at home, live betting
At the last World Cup in 2006 live may be a key driver of growth during
betting was in its infancy. Since 2007 the tournament. Figures from FIFA
it has grown rapidly to the extent that show that the cumulative European TV
it now accounts for up to 40 to 50% audience for the tournament in 2006
of bets for some online players. In- reached more than 5.3 billion viewers
play or live betting offers customers a and in Asia cumulative viewing figures
whole range of bets based around their topped 8 billion. Both represent a major
predictions for what will happen next. increase on the previous tournament.
These can be as varied as, for example, With Europe and Asia both well
which player will score the most goals, represented in the 2010 competition,
the next player to score or the total there is no reason to doubt that
number of yellow cards handed out by viewing figures are likely to climb again.
the referee. Competition for prime slots during TV
coverage – particularly at the start and
Making customers aware of the middle of each game – and sponsorship
opportunity to bet once a game is opportunities is likely to be intense.
underway will largely be driven by Effective media planning to pick exactly
effective television advertising. And with the right spots will therefore be critical.
World Cup betting: what do the odds look like for bookmakers? 5
Smart phone, smart Lining up for kick off
betting? The key issue for bookmakers is
how they will go about capturing the
Other channels too may well come to opportunities presented by the World
the fore for the first time in this World Cup, both in terms of acquiring new
Cup. The explosion in popularity of customers and then retaining them after
Apple’s iPhone (and other similar the excitement (or disappointment) of
devices) and the myriad applications it the World Cup evaporates. They need to
makes available mean that consumers balance the requirement to make their
are willing to do far more with their services easily accessible to novice
mobile devices than before. Some gamblers with the provision of more
bookmakers have already created sophisticated services to established
apps to address this burgeoning customers.
market and our survey suggests that
while a relatively low proportion (4%) That means successful bookmakers will
of those intending to bet say that they need to develop marketing strategies
will use their mobiles, the growth of that can be effective on more than
other consumer and entertainment one front. They will need to develop
services on mobile should encourage the right campaigns and choose the
bookmakers to investigate the best channels for communicating with
possibilities. both new and existing customers.
Chart 4: live betting on the up
Live betting – a growing trend
50
% sportsbetting stakes (PartyBets)
40
40
30
30
20
20
10
10
00
2007 2008 2009
Source: Annual Reports, Investor Presentations
6 PricewaterhouseCoopers LLP
Existing strategies that are predicated
on pay per click web channels may
Keeping the ball in
need to be rethought or augmented to the air
appeal to a wider market, potentially
switching focus from the web to Having attracted new customers to bet
more mass market advertising for the first time, or persuaded those
bookending TV coverage, or even press who bet very infrequently to do so
advertisements, to appeal to their non- more, bookmakers need to develop the
traditional consumers. strategies that can retain customers
once the World Cup finishes in July.
Plans to persuade them to increase
Keeping it simple the frequency of their activity or to take
a look at other gaming experiences
Online betting sites will also need to
online such as casinos, poker or other
adapt to capture new customers at the
sports betting, should be in place and
same time as offering core customers
clear before the World Cup kicks off.
the richness of content and options that
Just as is the case in the tournament
they expect. It may be that dedicated
sites for the World Cup with simplified itself, those who prepare best are likely
options and an easy sign up process to emerge at or near the top of the
will help acquire new customers quickly competition.
while customers who are already
registered are able to navigate directly
to their preferred environment. Praying for the right
Signing up to bet needs to be as simple results
as possible, at the same time ensuring
that new customers feel reassured Of course, all the preparation in the
that their personal and payment world can’t influence what happens on
details are held securely. And to cope the pitch. While bookmakers should be
with a potential sudden influx of new planning for the range of possibilities
customers – for example on the date and opportunities that this summer’s
that a national team is playing in a World Cup will create, some things
particular country – systems will need are beyond their control. Strong
to be sufficiently robust to handle much performances by outsiders will be
higher traffic and levels of transactions gratefully received by the bookmakers,
than normal without stalling, falling over and as history shows are not beyond
or slowing down to an unacceptably the realms of possibilities. But victory
slow pace. Novice punters are unlikely for Brazil or Spain, the pre-tournament
to have any loyalty to a particular favourites, will not be the result the
service – and will not persevere with betting industry is looking for.
one provider when there are many other
options available.
World Cup betting: what do the odds look like for bookmakers? 7Contacts
To discuss any of the issues in this article, please contact:
David Trunkfield
UK Head of Betting and Gaming
+44 (0) 20 7804 6397
david.trunkfield@uk.pwc.com
For further hospitality & leisure research and news visit:
www.pwc.co.uk/hospitalitydirectionswww.pwc.co.uk/hospitalitydirections
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. This publication (and any extract from it) must not be copied, redistributed or placed on any website, without PricewaterhouseCoopers’ prior written consent. © 2010 PricewaterhouseCoopers. All rights reserved. ‘PricewaterhouseCoopers’ refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. Design: hb05989
You can also read
