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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
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Again, I think that this is another campaign that just isn't needed, just have a direct communication with UK government leadership who are under pressure of governance to act in an appropriate way and they will respond. Over last weekend, the eyes of the UK were set on entry as Iain Maximus asserted himself as one of the Grand National's greatest horses since Red Rum. Bets were placed in their droves as even the most casual punters flock to their online sportsbook of choice or head down to their local bookie to have a flutter. But it's the latter that we're placing the spotlight on today. Because though duties on retail gambling have not been raised, brick and mortar shops have been at the brunt of mitigation as operators looked to slash costs and operate more efficiently as their online casino 40 % tax realities hit home. So what's happening in the UK retail sector and what does the future hold for some of these heritage community pillars? Welcome back to iGaming Daily, supported by Optimove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today I'm joined by iGaming expert editor Joe Streeter. and SBC's media editor at large. Ted Menmure, Joe, how are you doing? Yeah, I'm all good, Charlie. Thank you. No winners at the Sportsbook this weekend, but appearing on um consecutive iGame in daily episodes, I feel like a winner. Brilliant. Yeah, no, this is your you've got your hat trick ball now, Joe. This is three in a row. Well done. Oh, three in a row. OK, I'll take it. Couple of losers this weekend as well, Charlie, obviously. oh I've got to bring it up. Yes, Spurs lost again, right? Are they going down? They're going down. mean, I was there. I was there. watched them play. They're going down. Yeah. Ted, how are you? Very well. And unlike Joel, I was a winner this weekend. Just not on racing. Nice. Well, you you can't win them all. You can't win them all. But just before we dive into the retail sector in full, there was a story doing the rounds at the weekend in the red tops. the Green Party leader, Zach Polanski, is no stranger to making the headlines since he was elected, but he's once again riled up the red top and called for a ban on horse racing. What's happening there, Ted? Yeah, listen, I think firstly, it's important for a bit of context about the growth of the Green Party in recent years. They're a surging party. Their membership is through the roof, which I think is important because it shows they do speak for a big proportion of the nation, for a uh significant amount of the nation. They're not a niche party anymore. um When it comes to policy, although it's not, you know, there's no manifesto or anything like that. But when it comes to outline and policy and speaking about policies, Zach Polanski doesn't hold back and he's not holding back on this one. uh Hannah Spencer, who won the Gorton and Denton by-election, has now become kind of one of the faces of the party. She was very, uh a big chunk of her kind of rise in politics. was down to her stance against Greyhound Racing. And she's since, since being elected in Gorton and Denton has continued to lend her support to the, the banning of Greyhound Racing. So this isn't a kind of a left turn, pardon the pun, for the Green Party. But what I will say is I don't think this perspective, this opinion is isolated to the very left of politics. think a YouGov poll prior to the national Revealed that kind of 38 % of people would back a ban on racing. Um, and this was only elevated by the sad fate of Golden Dancer, who after winning, um, on the second day of entry, uh, was, uh, yeah, had to be put down a very sad story. Um, and I just think it speaks that kind of racing has more to do. Racing is in a PR battle right now. What I will say on the other side of that coin is I was at football on Saturday at three o'clock. Um, so obviously I was at football during the national, um, and during which time when the national was about to get underway, even whilst the game was going on in front of us, it wasn't a good game. I will admit, uh, the phones came out from so many people. People were gripped by the national people were, uh, engaged. Um, they wanted to know what was going on. went into the, and we're, we're, we're in April now. So football scores are massive. They're all very consequential. I went into the clubhouse, the pub to. at halftime to see the scores and they had the racing on. People were more interested in the racing. TV viewing figures were very high as well. So there's a massive interest in racing at the moment, but it is somewhat polarised and I do think racing has more to do when it comes to winning this PR battle. Can I just interject? I've only read the headlines here, but I think what Graz team is, how are the red tops or the media kind of... framing this kind of conflict between the Green Party and racing, but is it also on kind of class divides of the sports itself? And what I don't understand about the Green Party is aren't they meant to be kind of the agricultural party, the party that cares about rural communities? You would think so, but I think um the success and the attendance is both at Aintree over the weekend, but also at Cheltenham in March as well, as testament to the interest in racing across those two big festivals. Anyway, that was just something I wanted to highlight in passing because I think the big thing for us to discuss here today is the outlook and the future for the retail sector because I gaming daily, we talk a lot about online and online regulation and things driving those markets, but retail betting is still a huge part of this industry. We know that there is an impact. The UK tax hikes, along with a whole host of other factors is having an impact on the high street and retail betting is no different. Joe, what do we know about the impact that tax hikes and some of those other factors are having on the land-based sector since the start of April? Yeah, well, in passing, Charlie, I was brought on the premise that this was going to be a Zach Polanski-focused podcast, but we will adjust. We will adjust. eh No, there have been shop closures, but I think it's somewhat unfair to say that the majority of these were down to tax hikes. The sector was shrinking anyway. um It's part of an embattled UK high street, and that is only elevated by things like national insurance rises and various other economic factors. I think the retail betting sector in moderation has really strong resilience. It's shown that before. The last big adjustment like this was obviously the lowering in stakes in FOBTs, a massive adjustment. for the retail betting sector, but it adjusted, it evolved, it even streamlined in parts and it continues to move on. think what Saturday will have shown will have been like everything that's great about the retail betting sector. And there are some things that aren't great about it, but I think what Saturday will have shown is everything that is great about the retail betting sector, a good atmosphere in shops, lots going on. And something else that doesn't get mentioned is kind of safer gambling support as well. get that kind of face-to-face interaction when it comes to responsible gambling support, which is really important. But yeah, to your question, in terms of how much tax hikes are having an effect on the retail betting sector, it's really hard to tell at this stage. We kind of have to wait to see what will happen. But I think it's worth noting that any kind of shop closures at this moment can't be entirely put down to tax hikes on their own. Ted, feel free to add onto that. Yeah. I mean, think it's just, look, last year leadership kind of all outwalled that if any tax on business, any new bottom line pressures, the first revision is going to come from marketing and the retail estates. And, you know, no one was lying. This is the script that they were handed. These are the adjustments that they were told it would be. taking on board and we've seen it and we've seen it by across every gambling PLC. know, from Entain announcing that a minimum of 140 shops will be closed from, you know, they're reviewing that from November onwards. Pally Power are kind of right sizing their estates to being between 500 and 600 across the UK. And Evoke, again, they're going to replace William Hill Estates under review up until, I think they're going through a period of kind another consolidation, to kind of rearrange their business for what's perceived as an upcoming sale. It comes down to the maths and to the numbers and where you're going to find those kind of first instant adjustments and retail was always kind of in the firing line. And that's what's being followed through on. I don't see where kind of anyone can dispute that. I think the harsh reality is that the cost of business is increasing and those consumer habits continue to shift towards online and digital betting. think some of those trends that we've already seen are going to continue to play out. Ted, you've outlined there some of the examples of where shops are closing or they're sort of under review. Here's a question for you, Joe. Was the government happy for this to be a byproduct of its policies, of the increase in online casino taxes, in the increase in uh national employer contributions, national insurance employer contributions, of the increase in minimum wage, et cetera? Or do you think it's simply a government that's not knowledgeable enough about the industry to actually understand the impact of some of these measures? I wonder if me and Ted might disagree here again. um I don't think so. think to a degree, ah there will have been some collateral for want of a better word in the retail betting sector, but I do think provisions were taken to try and secure a future for retail betting in some form, even if it is streamlined, obviously. Uh, you know, know bingo, juicy, abolished. know the, uh, you know, retail betting, uh, tax, tax rises were not implemented. They were kept the same. Now I'm, you know, I'm not naive to be, to think that the sector was protected entirely because of that. When you, when you implement, um, RGD tax hikes, as Ted said before, um, the retail betting sector is going to be one of those things that is looked at as a consequence is because. It rarely operates in isolation, never do retail betting operations operate in isolation. They are part of a bigger project for operators. So they are going to feel the struggle as a trickle down effect, if you like. But the government doesn't want job losses in the retail betting sector. They don't want shops, just a myriad of shops closing across a high street where shops are already closing en masse. Not just betting shops, you know, shops across the board, they're struggling to fill shops. Um, so I do think provisions were taken. Um, were they enough? I don't know. That's, you know, it's hard to tell. We have to wait and see on that one, but I do think some provisions were taken to try and secure a future for, for retail betting. think, uh, it was a little bit of a surprise when there were elements of the the tax rises that weren't there. were smutterings of good news for the betting sector in the budget last year that were retail tax not being raised, were Bingo duty being abolished. So yeah, I do think provisions were taken. Whether they were enough, I'm um not sure. And Ted, what's your assessment of this one? I think it's kind of too easy to say, look, UK gambling was the victim of the budget or there's this kind of labour plan behind it to get rid of any kind of high street presence. I don't think that's the case. I think that you've had two very different budgets delivered by the Labour government. The first one was this one to avoid austerity where they told the UK public that they had a 30 billion deficit to fill from the ex-tourist conservative government. and Rachel Reeves had to take tough decisions. Now, I kind of view that at one point they would have raised, uh it was quite clear that in the second or third budget delivered by this government, an RGT or online gambling tax rise would have been delivered. However, I think it's just so clear that the consequences there as soon as you deliver this kind of bottom line hit would have gone towards marketing and it would have gone towards your estate. The fact is that it's been a decade of revisions on UK gambling estates uh since the FOBD's decision, since COVID. And it's getting tougher and tougher to run a profitable estate. The gambling PLCs know that. And I think that this is just cold, hard maths. definitely. Look, Ted, Joe, we need to take a short break, but we'll come back and we'll continue the discussion. Welcome back to iGaming Daily. Reports suggest that Evoke is looking to sell. William Hill brand of shops or at least some of that estate as part of that ongoing strategic review that Evoke have at the moment. Do we have any inclination of the interested parties and whether that story has sort of moved along at all? Ted, how about you take this one? Okay. So I think by the end of the month, we'll know what Evoke's hand is, especially with regards to William Hill and who... That's supposed with buyer is in terms of how much of this state they're to take over and how much they're going to kind deleverage William Hill from uh evokes current portfolio. uh My view is that, uh you know, whoever shows their hands and this is actually one of the kind of the more interesting stories of kind of the first half of the year is who really wants to disclose themselves as a buyer of William Hill. But also who's taking on this risk? uh Even to grow your kind of estate, it's been kind of mapped out that Bedford might go for it, ball sports, but it's just such a woeful time to be on the high street. And if you really want to put themselves forward for that exposure, I won't be surprised if I kind of pulled back its decision or kind of delays this. And the other thing is it's against such a kind of harsh economic backdrop. I wouldn't want to be the leader calling on this decision or on this M &A. Joe, I'll bring you back in here because you're the self-described voice of the high street on the show today. what do you make of the future for William Hill particularly? And do you think there's any value in retail shops, sort of full stop? I think I might know your answer on that one. What do you make of it? There was Charlie and then you made me the voice of the high street and now they're all doomed to be honest. Now I will provide a little bit of light. um Last year they experienced a little bit of an uplift in their retail vertical where revenue rose by 10 % year over year um and that comes amidst a challenging environment. um and as kind of profit margins are squeezed for operators, one area where there is room for growth um is the retail sector. I do firmly believe that. think there's an opportunity there, um especially as kind of online taxes are hiked. William Hill is such a strong brand as well. It's such a recognizable, so much legacy in the UK. I think there is a real opportunity there. Some of the... The firms that Ted mentioned, you know, if you're a bet for it, if you're a boy or sports, and this is kind of your meat and drink, the UK high street. Yeah. I think William Hill is such a strong legacy brand. It's tough. It's going to be tough. But I do think there's an opportunity there. If I could kind of throw a question back to Ted, just to kind of change the perspective on this. In terms of retail betting, it's been a little bit stale for quite a long time. Um, with a little bit, it is, guess my question would be, the, does the industry need to innovate in the retail sector, provide a bit more focus to the retail sector? And then we could see kind of this new avenue for growth. Um, where, uh, you know, a tax environment isn't as challenging as it is online. Do you think we've been guilty as an industry of maybe neglecting the retail sector a little bit? I don't want to be cut a Debbie down and say, look, all retail is dead. It clearly isn't, but I just think that the complexities of bringing growth back to your retail estate are at the whims of a wider economy, right? then when you compare it against what you have online and kind of that ease of access, and maybe that's a marketing campaign or you're a bonus offer or how good you are at promoting one market in general, those factors are much easier to get at, you know, on an online environment than they are in a retail environment. I think that again, you you raised some very good questions. I think that what is happening essentially and not just in Bennington gaming is that retail itself in the UK is becoming a very specialized discipline in which, you know, you need a lot of capital investment. You need a lot of like kind of long-term commitment. And that's the other thing. mean, you know, great. Okay. You know, we are in a cutthroat business, not like gambling, right? But just don't think that that kind of like feeling of, you know, bye-bye investors of long-term planning needed to retail carries over as easily. And I think that the PLCs, especially the ones with retail exposures, oh they kind of fall into that category too. oh It's such a kind of specialized... discipline now, uh, retail in the UK that I just think it even carries its kind of an own investor profile. It's a kind of long-term prospect and everything to me kind of points towards kind of an oligopoly of a one or two, two or three players down the line that can survive in this kind of very, very hostile environment. Yeah, Ted, you say a hostile environment. Um, I think that leads me. very nicely onto what I think will be one of our final points here because I think we've got enough of the future outlook of this. I just want to talk about some of the political side of this because betting shops and perhaps more specifically adult gaming centres, know, these sort slot casino type centres have attracted quite a lot of criticism for their perceived sort proliferation on the high street recently. You look on community social media groups and you see people complaining about betting shops. They're sort of put in the same bracket as these barbers or these discount shops and these takeaway shops. And this perception that that's the only thing that's surviving on the high street. Joe, I just want to tap into some of your experiences here because you worked in betting shops, are they sort of this hub of evil that they're portrayed to be by some in the press and some political quarters? I just want to get some of your reflections on that experience. Yeah, no, it's a pertinent question, especially off the back of the Grand National where, you know, betting shops are, they're buzzing. They're really buzzing with such a wide group of people. Really, you know, one thing I miss is working in the betting shop on a Grand National day because it's so much fun. It's so busy. um I can speak less about adult gaming centers, I should say that first, because I've not visited so many of, and I haven't worked in them, but I did work in a betting shop for seven or eight years in various betting shops. Yeah, it's really interesting that you said, I don't think they're a hub of evil, I will say that straight off the bat. That's quite the explanation, but quite the description, but I don't think they're a hub of evil. But it is interesting, of the two ends of the spectrum of how betting shops are perceived. The perception of betting shops is crazy. And this was seen in the run-up to the budget, I think, if you remember the BGC speaking to, I think it was like the select committee um and the BGC kind of described betting shops as these community hubs, you know, where people go and... You know, they have company, otherwise quite lonely people have company with the staff. And I saw that firsthand, to be honest, that is not fictitious. That's very true. You know, there's older heads in the betting shop that visit that it's part of their daily social interaction. They do a lucky 15 every morning, but more importantly, they have a coffee, they chat to the staff. You know, know, your regular customers, they're nice people. It is part of a community. then you kind saw the other side of that, which was the select committee describing them as, I think, basically crack dens. They were really uh hubs of evil, Charlie, like you say. um And uh it was quite something to see both ends of that spectrum in terms of perception. um I do think they can be good places. think it's a very big sector, right? And that there will be elements of it that aren't good and elements of it that are good. uh I think if you can focus on the bits that are good and really get them right, think that's important. One thing I would say is, you know, as RG and a safer gambling takes on heightened importance, you cannot beat face to face interaction, especially when it's someone that you know, you know, you know, the staff in the betting shop, they know the people that visit that betting shop. They know their betting habits. They can see they know their mood, they know how they are. If you see something that is abnormal and is worrying, you can confront it head on and speak to that person head on. I think that the safer gambling element of retail betting is very crucial. But yeah, there is work to be done on that front as well and to improve betting shops, I'm sure of that. But I hope that comes. Sure. Ted, let's hear some of your reflections on this one. Okay. So I've actually been thinking about this because it's something that's become ever since kind of that campaign to bring back our high streets was launched by kind of these 40 local MPs. And actually, look, this might sound controversial, but I actually agree with a lot of what the campaign says. I actually do think that local councils should have kind of ownership of the licensing for gambling premises. But I also think that, you know, as an industry, we can have direct discussions with local councils. Now, if you own a betting shop, right, and if you're a patron of a betting shop, right, it has to be of a certain standard of high quality ID verifications. And like Joe said, there are good bookmakers and then there are bad ones. And you should have these kind of very kind of principle standards of how to run a high street bookmaker and how to be a community business. Right? As he said, you know, it could be a place where people just go look, read, spend a couple of minutes, look at sports information that is, you know, that could have a communal feel in that. And I think that councils should have a right to say what type of businesses they want. And if they have concerns about the proliferation of betting estates here, they should be able to impose themselves or intervene in that. Again, I think that this is another campaign that just isn't needed. Just have a direct communication with UK Gannon leadership who are under pressure of governance to act in an appropriate way and they will respond. I think that everything needs to be a part of mental debate. you know, a parliamentary consultation for like, why are we trying to find the perfect number of betting shops? think the solution there is to work with Iskandis. Ted, Joel, very quickly before we really quickly. mean, you know, we started the conversation by talking about, you know, Zach Polanski wants to uh ban horse racing from the UK. Ted, do you have any optimism that, you know, in theory that practice works very well that you've just described? But do you have any optimism that the, we've, seen how anti gambling some of these councils are. Uh, do you have any optimism that they would kind of those lines of communication could be, uh, could be bridged and could, could be, um, feasible. No, no, this is a good question. think we're going to kind of rise this up in our conferences and in our media coming up and the governance of gambling, right. But not just from a political level, but actually who sits on a board. And I think that there should be more kind of community engagement, community stakeholders, because, Drake, you know, you've got a lot of guys who are great at M &A deals, great at corporate financing, but they've got no kind of community engagement there. And again, like, you know, you're now dealing ever more with MPs, local counselors, mayors. And I think that if I was in UKGAM and PLC, I'd say, you know, who are the experts in dealing with councils, right? And even at a time where everyone's kind of revising their estates, well, okay, revise them for a positive end goal to say, we're only going to have X amount in these councils, which are reflected in the conditions of, you know, what these high streets are going through generationally and where, yes, okay, maybe the public doesn't want to see five-bedding shops in a certain area or targeting a certain part of the... of the constituency. But it's just, me, I find it's a fresh thinking. Yeah. Fresh thinking and community engagement and communication, I think is all really important. But in this polarised political time, it's quite tough to get consensus on, And yeah, we'll see how that goes. But look, Joe, Ted, fantastic debate. Really enjoyed this one. Thank you so much for taking the time out to talk about this. Thank you to Optimu for supporting the show as always. Thank you to our audience for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.