Home » How Betting Shops Have Evolved Over Time

How Betting Shops Have Evolved Over Time

If you take a look at the betting and gambling industry and see a lot of healthy competition, with hundreds of brands competing for our money. There are many businesses, however, while they may appear to be independent, are actually members of the same group and you might not realize it. Like most markets, there are a few big players and the rest have to be a bit shaky for the rest of the custom.

There aren’t only the old high-street bookies such as Paddy Power and Betfred that are at the top of the biggest betting company leagues. Numerous early bookmakers that are solely online have already defeated the previous bookmakers that were based in the land including Bet365 and the largest and the first trading platform online, Betfair. Combinations between companies that are already big such as Ladbrokes as well as Coral and Betfair and Paddy Power have created behemoth bookies and the giants have further joined forces to create massive companies worth billions of pounds, like Entain as well as Flutter Entertainment, who are currently expanding into America.

Bookmaking’s future in the UK is uncertain as it risks becoming a monopoly of a very handful of huge companies, similar to how the energy markets operate.

In this piece, we examine the growth of the UK gambling industry and the extent of the profit earned, as well as the rapid change to online gambling and gaming.

The Size of the UK Gambling Industry

The UK gambling industry generates about PS15 billion of annual revenues and was growing at 8 percent a year until the pandemic of 2020. From this amount, over one-third (PS6.8 billion) comes from online gambling, with a rough split of 60% casino and 40% sports betting.

The industry as a whole contributes around PS8 billion into the UK Treasury each year. directly employs more than 50,000 people (perhaps up to 100,000 if you include indirectly employed workers).

Despite the continuous shift to online betting since the turn of the millennium , there’s more than 7600 betting outlets in the UK (90% of them are run by Coral, William Hill, Paddy Power, Ladbrokes and Betfred), 648 bingo halls along with 1448 arcades as well as 84 casinos that are located in the UK (52 of which are owned by Rank Group and 32 by Genting). There’s currently in the area of 200,000 gaming devices that are operating in the UK too, of which around 40,000 are the controversial fixed odds betting terminals (FOBTs).

The National Lottery (and other lottery) revenues are also part of the overall gambling revenue figure. This make up to PS4.15 billion of the total. With in the region of PS300 million going back to good causes.

High-street bookmaking accounts for a lower amount, PS2.4 billion annually, making up over 54% all non-remote gambling revenue in the UK. Arcadesand family entertainment centers, bingo halls and casinos as well as pools betting (such as the Tote) and on-track bookies represent the remaining.

Casinos that are located in the land generate more than PS1 billion in annual revenue. With the complete shift to online casinos, in the real world, the gaming machines like slots make up just 21% of casinos’ income, whereas table games such as blackjack and roulette make up the other 79%.

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On-line Betting and Casino

Approximately 58% of all gambling profits online come from remote casinos. About three quarters (72 percent) comes from slots, and the remainder from table and other games (an opposite trend to land based casinos). Poker, which is classified under casino, generates just 3.5 percent of the total revenue.

Sports betting is second most lucrative sector, generating around 38% of total online revenue. About 46% is football betting, approximately 32% comes from horse racing and the rest from other sources, with virtuals making a surprise appearance as the 3rd most popular betting sport. This is a sign of the trend shifting away from football and indicating that bettors diverting their wagering interests, since footy used to hold around 54 percent of all online sport bets.

Other sources of online revenues include online bingo, exchange betting or pool-based betting. However, lottery revenues are not listed in this article.

The online sector in 2014 comprised 29% of total market share. By 2016, this had grown to 32%, and by 2020 it was 44.5 percent. If you exclude lotteries, then the online gambling industry accounted for 60% of the remaining annual market share from gambling related actions in UK and it is clear how rapidly the internet has taken over the gambling industry.
Development from High Street towards Online Betting

Apart from the odd independent bookie as well as the stalls that you can find at races, almost all bookmakers now offer online betting. Of course, it never used to be this way, and prior to the internet age breaking into the industry was not as easy to achieve. For a full history of gambling, check out our dedicated page.

Pre-1960’s

Prior to 1960 in the UK it was unlawful to take bets away from greyhound and horse tracks. Gambling was heavily regulated the government. Although there were some illegal operators, overall you would find it difficult to place a wager away from the track.

Bookies did still place bets off-course by using loopholes in the law which allowed bets to take place via mail or over the phone. This is the way William Hill started out. If you had enough money, of course there were always choices available, Ladbrokes for instance, began as a men’s bookmaker that served high profile clients. If you were , however, an ordinary working class man or lass , however there were a many options to choose from.

However, the majority of betting was for horse and dog racing only. Football betting was mostly banned with the exception of pools with low stakes syndicate games like football pools (which still exists in the present).

Prior to 1960, betting was simple as you had to go to a race-track to bet (or gamble illegally in a backstreet gambling place). It was only a matter of time if you were rich when the law wasn’t applicable to you. In that case, you could bet through discreet merchants.

1960 Betting and Gaming Act and Betting Shops

In 1960 the government finally took on the new age. People with a normal life had more disposable income in their pockets and they wanted more choice in how to spend their money. The act on betting was the first to allow gambling off-course, and the next year, in May 1961, a whole host of betting establishments had were open across the country at a rate of 100 a week.

Betting on sports was largely limited to horse racing, and there were regulations in place, such as the ‘trebles rule’ on football. It meant that all football betting had to be accumulators that had at least 3 or more choices, or else you could not bet. The only sports that you could put singles bets upon was horse racing.

Yet, the new business was well-liked by the citizens of Britain and sowed the seeds that eventually led to the UK becoming the biggest betting nations (per head) in the world.

One of the very first people to open new betting shops is Joel Coral and 10,000 shops were reported to have been opened within the first six months. In the United Kingdom, the biggest bookmaker in the high street, William Hill, initially refused to open betting shops because they were considered to be an affliction on society. The firm reneged in 1966.

1970s and 1980s

The bookmaker industry grew exponentially during the years following the legalization of high street betting. By the 1970’s there were 15,000 bookmakers in the United Kingdom.

It was during this time that many of the biggest names we recognize today built and built their brand. Britain’s oldest bookmakers, Ladbrokes, William Hill and Coral were earning so much that they even started investing in other sectors of leisure.

1990’s

Despite the enormous popularity of the high-street bookies over the past three decades, the industry was not able to attract a large market. The vast majority of punters using betting shops were working class people and the image of these shops as dirty dark and smoky with fumes and foul language did not make a difference.

Bookies sought to create more customers through the introduction of new features for example, live sporting events in the shops as well as new football coupons , to attract more diverse bets and customers. The removal of the ‘trebles rule’ for football in 1990 was a huge step in helping bookies expand their offerings to allow punters to back singles on many sports.

A progressively better image, wider range of markets and bets and more sports that are telecast (especially Premier League football) and an ever-growing disposable income was the reason why the fortunes of bookmakers rise again.

By the mid-1990’s the industry was in a state of lockdown with five massive companies dominating the scene, as well as some independent players across the country. Many believed that gambling and betting could be the same for all time. That was until the internet came along.

New Millennium and the Internet

As the 1990’s came close to an end, a new threat started to appear in the traditional order: online betting. This was more dangerous for the established high street bookies than you could imagine.

The bookmaking market on the high streets was controlled by a range of gambling and betting acts, and most importantly, betting was taxed (9p/PS1 placed). Gambling online was small bit like the wild west. You could simply set up where you wanted, open your website and start accepting bets from your customers tax free.

While avoiding tax on the winnings and stakes of gambling was, at the time, technically illegal it was almost impossible to police. The new companies and the bookies that were once on the high streets began to create new websites, most of them located offshore and in Gibraltar or Malta and Malta, in order to avail of tax-free trade (most remain in Gibraltar or Malta today).

In the late 1990’s and early 2000’s the market share online was still quite low. Even though the new , unregulated online trading was of concern, it wasn’t sufficiently widespread to bring about changes. The bookies were still making enough profit from the market even as tax-free brands were now taking up a portion from the profit.

Victor Chandler and Tax

In 1999 Victor Chandler (now BetVictor) moved his bookmaking company off shore to Gibraltar in protest at the tax rates on betting in the UK by selling the 41 of his shops to Coral. This allowed Victor to offer betting options for international customers, particularly from Asia and the Pacific region, without having to pay UK tax. This also permitted UK punters to bet without paying the 9p/PS stake tax.

It is believed this decision that led Gordon Brown, the then UK chancellor at the time, Gordon Brown, to remove the tax on betting in the year 2001. Saying that although he removed the tax directly borne by the punter , the new tax were levied on the bookies profits made in the UK and at this point the ship was mostly out of the water and most traditional bookies operated online via overseas.

2005 Gambling Act

In the end, the government realized that the status quo was not going to last for ever. This wasn’t just about taxing corporations either as anyone could create an overseas website and it provided no protection for UK customers as per the law.

In 2005 the UK government created a new independent body that is accountable to the Department of Culture, known as the Gambling Commission. The Gambling Commission was established to issue and oversee the new UK gambling licences as required by law under the new Act for any business that wants to provide gambling services (both offline and online) throughout the UK.

The overnight change in the world of online betting as all operators have to be licenced to operate legally in the UK.

2010’s

The bookshops of the past had the best of both possible worlds. They had their old high-street operations, and while not expanding at the same rate as the pre-online days, was not declining in the manner that many people expected. It seemed both online and offline betting was flourishing and those big old firms were in the ideal position to profit from this.

Still they didn’t have it all their own way. There were a handful of companies that began in the latter half of 1990 and the early 2000’s were starting to outdo the old order, specifically Bet365, Betfair and 888. In 2010, they had secured a large share of the market for online.

Second decade in the century witnessed a critical switch where online gambling surpassed street bets. A growing number of people could use the internet, particularly in the mobile phones. With the absence of stigmatism when betting online vs the high street, this industry saw the biggest growth in the 1960’s.

It wasn’t all win-win for the major book stores in 2010, the decade also saw a plethora of companies launch into the market. A lot of these brands weren’t bound by the cost that come with running many shops on the high street or having a lot of employees. Through focusing on specific markets, they could compete with larger companies. The result has been an abundance of mergers and acquisitions over the last few years , as larger companies try to hoover up rivals and develop new products.

2014. Gambling Act Amendment

By 2014 the majority of gambling transactions were conducted online by businesses based outside of the UK market. The result of this was the UK government paying lots of tax.

The amendment to the gambling act of 2014 was introduced due to several reasons, like a greater concentration on responsible gambling as well as protecting vulnerable players. The primary reason for this was honesty though was to allow the government to increase taxation of the industry.

The law introduced the introduction of a new point-of-consumption tax on UK licenced betting sites and bookies. This meantthat regardless of whether they are you are based or operating in the UK or not, any merchants the intention of offering gambling services in the UK were required to pay taxes on their UK profits. This levelled the playing field and, to be honest, put the burden on the already bigger operators.

However, the law on gambling is set for a revision to keep pace with the latest technology, so there could possibly be more to talk about within the next few months.

Mergers and Acquisitions

Mergers and acquisitions aren’t a new thing among bookmakers, and many have been buying up smaller independents for years. The trend in recent years however of the big companies merging is unique and possibly is a new phase in publishing.

As with all free markets one of the challenges in the coming years is to maintain competition. When markets are new (as betting on the internet was in the late 1990’s and early 2000’s) there are many new areas for businesses to take advantage of. With time, however, money talks and the biggest operators are able to buy smaller players to include their own products or simply to eliminate the market.

Only time will tell but there is the possibility that several betting companies will corner the market, and, similar to like what has occurred in the banking and energy markets, could begin to join forces. This would be an issue for gamblers and companies that are looking to enter the market.