THE ONLINE BINGO industry in the UK

THE ONLINE BINGO industry in the UK has enjoyed a meteoric rise to prominence in the past four years. The latest BingoPort. Bingo Trends data shows over 300 million in pure UK online bingo turnover in the last quarter coming from over 400,0 unique players.

The potential was always there. Trips to traditional bingo halls have been a staple of many UK families over the last century. The national daily newspapers carried bingo games for decades. Understanding this history is only the beginning of explaining this phenomenon. The relaxing of advertising standards and the introduction of the smoking ban created the perfect storm and has brought us to where we are today.

When looking at who has the largest share of the UK online bingo market, it’s interesting to note that each operator has worn its own path to market share.

Without question, the number one in terms of player nu mbers is Tombola. Having piggybacked on The Sun newspaper for many years, breaking away from this partnership allowed them to grow their player numbers even more. A strong television presence has contributed to this.

Coming from a traditional offline bingo hall background has helped to grow Mecca Bingo and Gala Bingo. These two online bingo sites have significant market share due to their strong trustworthy brands around the country.

In a similar vein, traditional high street UK bookmakers have used their strong brands to diversify into bingo, creating new lucrative revenue streams. Those that have successfully branched out include Ladbrokes and William Hill.

Then come the new kids on the block - those that have built an online presence in a matter of years without the foundations of a high street brand. These include industry heavyweights such as Foxy Bingo, Costa Bingo, Jackpot joy and Wink Bingo.

From a bingo player perspective, our research has shown some interesting trends. Even though the online bingo industry is relatively new, players have managed to find and stay loyal to one or two brands. Our latest research report shows that while the majority of online bingo enthusiasts have joined over five real money sites, over half of all players ren win loyal to just one site.

Whilst this would seem to suggest that new operators would find it dif ficult to gain market share, two indicators show that there is still space for serious entrants.

First, our research has shown that ten percent of online bingo players started playing for real money within the last three months. Second, around 50 percent of all players showed a willingness to change their bingo site of choice based on promotions and reactivation campaigns.

Overall, the UK online bingo market continues to grow, predominantly thanks to the continuous stream of new bingo sites that launch each month. Our very strong view is that this will slow to a crawl over the next 12 months followed by continuous mergers and acquisitions and even some site closures by smaller ‘skin’ operators.
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perceptions of gambling may influence whether people play particular types of game in the first place

Perceptions and attitudes of what people think about gambling have often been dismissed by academics as being too subjective to be of any value in generating a reliable knowledge base about its place within the leisure industry. However, perceptions of gambling may influence whether people play particular types of game in the first place. Many types of gambling such as sportsbetting, slot machines, and bingo are an established part of the British high street, but bingo appears to have significantly less stigma attached to it than most other forms of gambling. So what implications do people’s attitudes towards offline bingo have for online bingo operators and affiliates? This article briefly looks at some of the evidence and trends.

CONSTANCE CHAPPLE, A sociologist at the University of Nebraska says, “Although gambling has largely maintained its deviant reputation, bingo, as a form of gambling, remains untainted by labels of deviance.”

She strongly argues that society has socially constructed bingo as an acceptable form of gambling that escapes the negative connotations attached to games played at the casino. This has been backed up by the most recent empirical research. For instance, in the latest British Gambling Prevalence Survey (BGPS) published earlier this year, we reported that those surveyed did not think that either the National Lottery or bingo were gambling activities. Furthermore, they did not want to answer questions about these activities when they were phrased using the word ‘gambling’.

Bingo’s reputation as a popular gambling activity appears to stem from its perception as a social activity that, in the past, was mainly played by older aged women.
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insight into the future challenges for bingo networks

David Flynn, CEO at NYX Interactive, provides affiliates with a fascinating insight into the future challenges for bingo networks as the gaming industry anticipates any move from ‘.com’ and state monopoly licensing to ‘.country’ licensing.

WHILST THE ONLINE bingo market is continuing to grow and, indeed, is anticipated to almost double in size between 2010 and 2015, the networks and infrastructure supporting this growth will need to change dramatically if they are to keep pace with the fluctuating needs of the various markets and their technical regulations.

As sportsbetting and poker take the lead in newly regulated markets, bingo is tending to follow a close third. Given the lower yields, smaller target segment and, in general, less political pressure being applied in this vertical, it is quite safe to assume that this initial trend will continue. In certain countries, one can also see that bingo may not even be regulated for the foreseeable future.

Granted, the majority of gaming operator-derived online bingo business is today either standalone or centralised in .com-style network models, provisioned in a small number of locations, however, over time this will gradually change. As more and more markets take a stand on regulation, there will be many factors affecting the distribution of technology for the production of online bingo solutions.

• Each regulated country may have its own RTP percentage, reporting, game and promotional requirements to name but a few.
• Ultimately, this creates the headache of several bingo networks setting up operations in agreement with each country’s regulations, ensuring that all data feeds (for example, data to AAMS) are completed with no cross-border game play.

When considering smaller countries, this model will not be viable for many organisations since the returns will not be worth the investment. Hopefully, the regulators will foresee this issue but if not, it will be quite a blow to the .com networks of today.

So what solutions are there which would allow for the smaller regulated markets to enjoy the benefits of scale of the larger ones? It can’t be a hosted network outside the country or, indeed, a copied network hosted locally due to the aforementioned costs. I personally envisage a new type of network coming to the forefront of the business, one that I have given the name ‘Flexwork’.

What is a Flexwork?

The existing network model which many organisations support today will not be sufficient. A one-system-fits-all approach will not be manageable as regulatory decisions come to the fore. In order for small country licensees to have the benefits of offering large jackpots and prizes, and yet retain control of all areas under the new regulations such as RTPs, responsible gaming rules, regulatory data reporting, game types and, thus, marketing, they need to have the option to manage their own offering whilst also having the ability to ‘dip’ into the larger pooled games.
This solution would not only support cross-border networked bingo whilst ensuring that each country’s regulations are adhered to but would also give the best possible player experience. Such a solution clears the way for pan-WLA member networks, gaming operator networks across various regulated jurisdictions and, above all, a better offering for the player.

As a ‘side’ thought

To add to the complexity, the bingo industry is acutely aware of the benefit of side or mini games in their bingo arsenal. Let us consider a possible scenario where a country regulates bingo but does not regulate casino. The commonly repeated statistic that 50 - 60 percent of revenues are generally derived from RNG-based side games would lead to a devastating effect on the business model for most bingo operators and providers in the market today. The solution to this is pre¬drawn batches of tickets as the base for the instant lotteries.

Notes: Gross revenues of Online Bingo Operators at USD 1.6 billion in 2010 growing to USDj.ibn by 2013 (MECN).
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