A summer of Victory… A summer of Loss… A summer of Betting…
What was the impact of the London 2012 Olympic Games on the Betting Industry? By Group 19
The Betting Industry… • William Hill & Ladbrokes are currently the market leaders in the high street gambling market, owning more than 2000 shops each. • According to an article in the Huffington Post, William Hill stated “the contribution by bookies remains a crucial part of the British economy, contributing £3.2bn, and paying £941m in tax.”
A Growing Market? • The market leaders of the online market are Paddy Power, Bwin & Betfair. • The rise in popularity of online gaming is the real growth driver in the gambling industry. • According to research produced by www.gamblingdata.com, UK’s online gambling market is worth £1.7bn with sports bets making up a large 38%.
How did bookmakers react to the Olympics? • Suppliers developed new strategies to increase their revenue by adapting to a new demand not just for sports betting. These strategies included: • Providing more services online to meet the needs of customers. For Example William Hill provided online gambling in 182 different countries during the Olympics and encouraged their customers to bet on anything they could think up. • Bookmakers offered bets on anything including the London weather; whether the Olympics would be over its budget and even on whether aliens would appear in a U.F.O. during the opening ceremony. 1 “Wanna Bet? Gambling on the London Olympics,” The Economic Times, Indiatimes, http://economictimes.indiatimes.com/news/news-by-industry/et-cetera/wanna- bet-gambling-on-the-london-olympics/articleshow/15121968.cms, accessed 25 September 2012.
Expectations… • Bookmakers all believed that having the Olympics in London would lead to an increase in betting activity and thus a large increase in profits. • According to an article in The Telegraph, Ladbrokes forecasted that “the sector would turn over close to £80m for the two-week period, compared with £4m from the Beijing Games four years ago, while research from Coral shows that 3 million people planned to place their first ever bet during the London 2012 Olympic Games.”
…The Reality • While William Hill receives an annual turnover of approx £18 billion and Ladbrokes £13 billion, the Olympic betting was only a fraction of this. • Opportunity Cost? The Glorious Goodwood festival, a regular horse-racing event, produces greater turnover for Betting Companies than the Olympics. Likewise, professional football, one of the most popular sports was on hiatus during the Games. Gambling companies can take up to £35 million on a premiership weekend. • An encouragement in Betting Culture? It was found in certain polls that regular gamblers did make bets to show their support for Team GB. Others were found to show that people didn’t fully understand many sports but placed bets nevertheless. This sort of attitude which doesn’t maximise the chances of success, usually works out in the company’s favour, hence increasing turnover. • It was also observed that video games, roulette and other gambling games attracted more customers than betting on the actual Olympics during the time.
…The Reality • Did this turnover have a positive effect on the economy? In a short answer - yes. Although in gambling, money earned by gambling companies may only be considered as simply “changing hands”, the Betting Industry still has a positive effect on UK’s Economy. • Foreign MoneyThe Olympics had betting occurring (in British companies) from over 182 countries, hence bringing foreign money into the UK and benefiting the economy. • Multiplier Effect!A person who places a bet is not only transferring money to the gambling corporation but induces further spending. For example somebody visiting William Hill may pay a taxi fare or buy drinks etc and this money spreads to other areas of the economy.More Jobs? • Olympics created many more jobs in the gambling sector due to the growth in demand. The large variety of sports required a larger number of “compilers”, those who determine odds on bets and have certain expertise on sports.
…The Reality • To summarise: • The betting industry did not meet its expectations of £80mrevenue during the Olympics. • The Olympics only produced aturnover of approx £25 million for the gambling industry. • This was partly due to the fact that many customers were not familiar with most Olympic sports’ rules and their functionality. • Despite the above, the gambling industry did create jobs, bring money into our economy, and have positive knock on effects on other industries and GDP as a whole. 2 K.C Johnson, “Lot of action on the Olympics in London? Wanna bet?,” The Chicago Tribune http://articles.chicagotribune.com/2012-07-31/sports/ct-spt-0731-olympics-bookies--20120731_1_ladbrokes-wager-william-hill accessed on 29 September 2012