Online Bingo – iGaming’s Forgotten Market?

Posted by Harry Kane on Monday, June 8, 2020

If you’re not an expert in the iGaming market, you could be forgiven for thinking that casino gameplay and sports betting were the only games in town. After all, casino products (including poker) accounted for an estimated 56% of the total online GGY at the end of 2017, while sports betting claimed a 37.1% share of this market.

This means that these markets accounted for a combined share of 93.1% of the online GGY during this period, creating little room for any other vertical to shine or dominate the attention of players.

Conversely, online bingo holds a relatively paltry 3.5% of the online GGY in the UK, making it officially a bit-part player in the iGaming realm. However, the latest figures show that this is also a relatively high-growth sector, and one that has continued to expand despite reports of its so-called demise.

A Look at Online Bingo in the UK – How is it Faring?

According to the UK Gambling Commission’s (UKGC’s) most recent statistics, the online bingo scene enjoyed an impressive period of growth in the year ending September 2019.

More specifically, online operators reported a cumulative 12.5% increase in GGY during this period, as online bingo services and turnovers rose to an impressive £198 million.

Of course, this was part of wider growth throughout the iGaming industry, with remote betting raking in £2.1 billion and recording growth of 4.3% in the year ending September 2019. At the same time, the GGY for the remote casino sector rose by 3.9% to an impressive £3.2 billion, reversing the nominal (and historical) decline in iGaming turnover reported back in March 2019.

Still, the double-digit rate of growth in the online bingo sector is notable, particularly when compared to more established verticals such as casino gameplay and virtual sports betting.

Why Is Online Bingo on the Rise

Some will argue that online bingo has been in decline since 2010, which represented the vertical’s halcyon days following significant investment from brands in the mid-noughties.

Much of this was down to the changing regulatory focus in the UK, which inadvertently placed online bingo at the epicentre of new guidelines. When 888 paid their record £7.8 million to the UKGC in the summer of 2017, for example, this was largely because the brand had allowed self-excluded punters to play on some of its Dragonfish bingo sites.

This heralded a turning point for online bingo in the UK, however, which has undergone a radical transformation since the beginning of 2018.

During this time, the iconic Gala Bingo brand has been completely modernised and transitioned into the omnichannel Buzz Bingo, while 888 moved to acquire the Costa Bingo brand from JPJ Group for £18 million and Gamesys for an estimated £490 million.

Rank also acquired Stride for £115.3 million, as the market leaders sought to consolidate their position and create a decluttered space where only the highest quality and most compliant online bingo experiences were available to players.

This raft of mergers and acquisitions has undoubtedly refocused and reshaped the market for the better, but it isn’t the only factor behind the resurgence of online bingo in the latest figures.

These also represent the growing dominance of female gamblers in the iGaming space, with women now accounting for well over 40% of all gambling-related activity.

Of course, online bingo remains a firm favourite amongst female players, and whilst women are diversifying their tastes and wagering across a growing number of verticals, they’re also spending incrementally more on their favourite pastime year-on-year.

So, even if there’s no direct evidence to support the notion that male gamblers are frequenting online bingo sites with greater regularity, the vertical retains a core base of loyal players who will continue to spend more of their hard-earned cash with every passing year.

Can the Bingo Bounce be Sustained?

More recently, leading bingo site MrQ also moved to enhance its own offering by adding Relax Gaming’s portfolio of games, highlighting the continual innovation and improvement that defines the contemporary bingo market.

This is also a clear attempt to target the rapid growth of the UK market, creating optimism that this can be sustained over a concerted period of time.

Quite aside from the fact that online bingo remains on an impressive upward trajectory, it’s also fair to surmise that Playtech is playing a leading role in the vertical’s evolution.

This pioneering software house has become the leading player in the online bingo revolution, with its cutting edge and tech-led approach creating a new generation of immersive and authentic games.

In many ways, this has mirrored the impressive evolution that we’ve observed in the online casino gambling space, where games have gradually incorporated three-dimensional and virtual reality technologies to replicate a corporeal wagering experience in living rooms nationwide.

On the subject of regulation in the iGaming space, we’ve also seen the focus move away from online bingo and towards virtual casino gambling and FOBTs in brick-and-mortar bookmakers. This has resulted in sweeping changes and betting caps, squeezing the margins of multichannel operators significantly in the process.

This trend is certain to continue in the medium and longer-term, with a cross-party body of politicians in the UK pushing to impose a sweeping, £2 stake limit on virtual slots and potentially similar verticals.

This would replicate the controversial FOBT cap, which was rolled out in earnest in April 2019 and triggered an estimated 56% decline in bookmaker’s offline turnover.

If such a betting cap was implemented, we can draw two clear conclusions. Firstly, online and cross-channel operators would experience a huge decline in turnover, although subsequent changes in the total value of payouts would arguably enable them to maintain similar profit margins across all affected verticals.

Not only this, but online bingo would subsequently become even more appealing in the eyes of operators, as this vertical offers higher betting thresholds and a relatively healthy margin of between 25% and 35%.

So, just as operators intensified their online focus following the roll out of the FOBT cap last April, the decision to impose stringent video slot betting limits could also encourage brands to increase their stake in the online bingo vertical.