Is the In-Play Market Dwindling?

Posted by Harry Kane on Wednesday, March 27, 2019

In the world of sports betting, in-play wagering has become one of the most lucrative markets for operators in the digital age. This has much to do with the way in which some sporting audiences like to participate in betting, with an estimated 76.8% of football fans in the UK enjoy a flutter on the action as it unfolds.

However, the latest figures have revealed that fewer British sports bettors made in-play wagers during 2018, with the UK Gambling Commission (UKGC) confirming that this market had lost some of its lustre in its most recent report.

This is arguably the last thing that UK operators need in the current market climate, but it may not have come as a total surprise to some brands. We’ll explore this further in the article below while asking whether this is likely to be an interim or a longer-term trend.

What Do the Numbers Tell Us?

The news was revealed after the UKGC’s most recent report into gambling participation in the UK, covering the 12 months between January and December 2018.

At first glance, the numbers bear a remarkable resemblance to those from 2017, with overall participation having risen by a single point to 46%. This breaks down as 51% for men aged 16 or over and 41% of women, while it’s interesting to note that participation also rose by 1% without including National Lottery players in the statistics.

In the case of online gambling, however, this remained flat at 18% of the UK population (23% for men and just 15% for women). This suggested that participation levels rose in offline casinos and bookmakers, with the soon-to-be regulated FOBTs proving to be a huge draw among punters for much of last year.

The biggest drop was reserved for in-play betting, however, as the number of punters who made such a bet online fell by three points to 23% during 2018. The decline was also evident across all demographics, save those aged 65 or over, with a few cheeky commentators suggesting that Ray Winstone’s increasingly gruff appearance may be scaring off younger gamblers.

Interestingly, it was the 35 to 44 age demo that reported the biggest drop, with the number of punters placing an in-play bet falling by a whopping 7% during the last 12-month period. This demographic is a key driver of online gambling activity in the UK, so the relative lack of participation in the in-play market will be a cause for concern among operators.

As for the immediate causes of this, the UKGC’s report may offer a little insight into why the rate of in-play betting has declined in the UK. More specifically, it was revealed that just 45% of all gamblers had been prompted to wager their cash as a result of advertising, with this number a startling eight percentage points lower than it had been in 2017.

This was evident across all demographics, although once again it was the 35 to 44 group (along with those aged between 18 and 24) who experienced the biggest drop of 13%.

The takeaway here is clear; as the advertising methods used by gamblers appear to have become increasingly ineffective over the course of the last 12 months. This is particularly true among experienced punters aged between 35 and 44, while it’s also had a direct impact on the emotive and often spontaneous in-play betting market.

The only exception to this rule was provided by social media, which prompted 57% of respondents to spend money on gambling (although even this number remained pretty much flat year-on-year). Not only this, but the medium remained most popular among punters aged under 34, while it began to lose its appeal among older bettors.

In the case of in-play betting, it’s actually television that’s the most influential advertising channel when it comes to driving in-play bets. This was the subject of huge scrutiny in 2017, particularly during the summer World Cup in Russia when research revealed that 62 out of 66 selected ad breaks across 11 televised matches contained one or more sponsored gambling message.

Many of these were screened prior to the 9 pm watershed in the UK, raising concerns that both vulnerable and underage gamblers were being inadvertently targeted during popular sporting broadcasts.

Given this, and in anticipation of stringent regulatory measures from the UKGC, the government and advertising standards groups, several of the nation’s market-leading betting brands pressed ahead to agree on a voluntary ban on airing gambling adverts during live sporting events.

This will come into effect from next summer, while this “whistle-to-whistle” ban on pre-watershed broadcasts has been celebrated by responsible gambling groups and advertisers across the globe. While it’s not universal or fully agreed by all betting operators in the UK, for many it represents a progressive and proactive step in the right direction.

The Link Between TV Advertising and Declining In-Play Betting

OK, we hear you ask, but what’s the connection between TV advertising, the voluntary ban and dwindling in-play betting volumes? This is a valid question, especially as the ban discussed by operators won’t come into play until the summer.

The answer may lie in part with some statistical analysis produced by iGaming specialists Regulus Partners, who revealed last autumn that the total spend by gambling firms on marketing has increased by a staggering 56% since 2014.

Even more interestingly, it was confirmed that the vast majority of this spend was reserved for digital marketing activities, with operators spending approximately five-times more on this channel than on television.

Analysis of these figures suggests that operators have gradually been moving away from television advertising, eschewing this medium in favour of digital and social media channels online. This is clearly a trend that has continued over the course of the last four years, with social channels in particular likely to deliver a far superior ROI than TV, radio or print in the digital age.

With less financial investment being sunk into television advertising by gambling operators during the last four years, it makes sense that this should have a diminishing effect in the minds of customers. With this channel being the most synonymous with promoting in-play bets through icons like the aforementioned Ray Winstone, we’re beginning to see this market stagnate amid an underlying lack of marketing investment.

The question that remains is why have gambling brands switched their focus so decisively towards digital marketing? Well, aside from the inflated engagement and participation levels provided by social media marketing and similar digital channels (particularly among the increasingly influential Millennial demographic), the obvious conclusion is that operators were already seeing diminishing returns on their TV ad spend and simply decided to take action.

Over time, they’ve therefore decided to realign their marketing budgets and reduce their reliance on less effective channels like TV, while increasing the amount that they spend on leveraging social media. This trend is prevalent in other sectors too, and in some respects online gambling brands have been a little behind the curve when it comes to reducing their television marketing spend (we’ll have a little more on this below).

If you being cynical, you could even argue that this insight was behind the strategic decision to impose a voluntary advertising ban on the terms of participating operators.

After all, this makes commercial sense if it can appease increasingly stringent regulators without having a significant or detrimental effect on participation, turnover or revenue, and it’s increasingly clear that operators are less enamoured with TV advertising than may initially meet the eye.

The Last Word – Is This a Temporary or Permanent Dip for the In-Play Betting Market

Of course, the sole reason why gambling operators have continued to spend as much as they have on TV advertising is arguably down to in-play betting, and the close affinity between these two entities.

In this respect, in-play betting participation may have been an unintended victim of the decision to reduce TV marketing budgets and agree a blanket advertising ban across the medium this summer.

It may also have been a calculated move by operators, as they look to sacrifice one market in order to protect others. Either way, it’s a decision that has yet to have an adverse impact on betting brands, with the total gross gaming yield (GGY) for the iGaming sector having increased by a hefty 13.7% to £5.4 billion in March 2018.

However, in-play betting represents a genuine growth market for betting operators, and they’re unlikely to countenance long-term decline in this activity.

Instead, they’re far more likely to redefine their approach to marketing in-play betting, perhaps by developing more integrated campaigns or further leveraging the real-time qualities of social media to engage punters.

Regardless, we should expect television to play and increasingly peripheral role in promoting in-play betting, definitely in the short-term and potential over a longer period of time.

After all, once the voluntary ban ends, it’s expected that the UKGC and advertising regulators will also restrict that way in which operators promote themselves through television and during live sporting broadcasts.

With this in mind, it’s hard to see how brands can overtly advertise in-play betting through TV, especially with their current approach. This will definitely an interesting space to watch in the future, however, particularly with a host of other regulatory changes set to alter the gambling sector dramatically.