Following a dreadful week of unfavourable results at Cheltenham 2016, all bookmakers will be longing for the start of Euro 2016 (France 10 June – 10 July). Euro 2016 will be the first major summer football tournament under the POC regime, Scott Longley examines how betting operators will look to turn the event into a cash cow…
This summer will all be about Europe for the bookmakers. Not the UK referendum vote; betting-wise that will be a small sideshow. The big event, of course, is football’s European Championships taking place in France in June and July.
The importance of this year’s tournament to the major sports-betting operators will be increasingly obvious as we get nearer to the tournament. The amount of free-bets and other promotional enticements and stunt will be an indicator of how important the tournament will be for the financials results across the sports-betting sector.
The value of this year’s Championships is clear from the revenue and sign-up figures cited by some of the major operators for previous tournaments. The most recent World Cup in 2014 in Brazil was a major revenue driver for the industry.
William Hill said it was a record-breaking tournament. In its 2014 first-half results, the company said that total amounts wagered for the whole tournament rose 97% on the previous amount in 2010 to £228.8m. But the William Hill number also highlighted the degree to which channel shift had occurred in the intervening four-year period between South Africa 2010 and Brazil 2014. While online total wagers grew at over 200% growth to hit £158.6m, retail actually fell back by 9% to £44.3m while telephone betting was down 66% to £5.3m.
The differentials were even more marked in gross win terms with online posting a 142% rise to hit £24.7m in 2014 compared with £10.2m while retail gross win fell back to £12.9m from £18.1 and telephone gross win was down 85% to £0.6m. The online figure came despite gross win margin falling 4.4 percentage points to 15.6%.
The shift to online should be obvious given the four-year gap between tournaments and particularly given the progress William Hill made as an operator over the intervening four years. Yet a comparison with William Hill’s figures from Euro 2012 still shows marked improvement with total wagers for the tournament coming in at £91m. It was in this tournament that online first surged ahead of retail with the growth in wagers topping 230% to £51.1m, though retail also saw wagers growth of 15% to £35.3m over the Euro 2008 performance.
Enhanced tournament revenues are replicated elsewhere. Betfair (as was) said World Cup 2014 revenues of £15.9m were double the previous Euro 2012 tournament while now merger partner Paddy Power said that total group stakes of over €198m were 130% up on the 2010 World Cup. Lastly, Ladbrokes said it saw group stakes rise 22.4% compared to the World Cup 2010 to £115.3m with online again accounting for the bulk of the rise, up 43% to £48.1m. But its retail offering diverged from William Hill, seeing an 8% rise in stakes to £47.8m and a 27% rise on grow win to £31.1m.
While the retail evidence is mixed, in online it is clear even from 2014 figures that not only have we already seen the shift to online, we are also seeing the evidence of the move to mobile. Indeed, more than anything Brazil 2014 showed that phone and tablet betting is now the the channel of choice for the majority of transactions. Ladbrokes said mobile was 63% of total stakes; William Hill said it represented 61% of its total stakes.
This trend is sure to continue into this year’s Championships; the latest figures from Paddy Power Betfair, for instance, showed that mobile was contributed 68% of total revenues for the year while Ladbrokes said that by year end 71% of stakes were placed via mobile devices. It is a fair guess that across the industry over three-quarters of all European Championship bets in the UK will be placed over a phone or tablet.
The only question left will be how many new sign-ups the operators can attract to their mobile offerings. Figures form Unibet for actives show consistent peaks occurring in tandem with successive football tournaments. (See chart)
Chart 1: Unibet’s summer football tournament actives
In 2014 the company said the World Cup had contributed to the achievement of a then all-time high of 601,319 actives compared with 552,338 in the first quarter of that year. In the subsequent quarter the number dropped back to 573,074. That represented a near 9% rise quarter-on-quarter and it followed a familiar pattern for Unibet; in 2012 the second quarter saw actives move up nearly 6% quarter-on-quarter from 403,788 in the first quarter of that year to 427,207 in the second before falling back to 382,378 in the fourth.
We are yet to see the level of marketing that will be deployed this summer; as the recent results season proved, the battle for supremacy among the bookmakers is is still raging and despite the millions that we know the will be spent by those at the top of the market, it is also true that there has been no let up in the competitive pace further down the scale. If this current football season is any guide, the likes of Betway, BetBright and BetVictor are likely to keep pushing for their share of customer wallet.
With an extended tournament, more games and more betting opportunities across more devices and outlets, the battle among the bookies will likely be as interesting from an industry perspective as any of the action taking place on the fields of France.
Football betting and industry marketing strategies will be discussed and debated at the ‘Betting on Football Conference’ 21 April Stamford Bridge Chelsea Stadium
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