BetGames: ‘the stars have aligned’ for Africa’s World Cup betting experience

City Bet Club projects ‘pessimistic outlook’ for Q4 despite ‘bookie friendly’ World Cup

A wave of turbulence is expected for the UK betting sector as firms prepare their Q4 trading reports with the Gambling Act review White Paper on the horizon, according to City Bet Club.

The tipster service anticipates that despite the ‘bookie friendly’ turnover of the World Cup in November and December, high marketing costs associated with the tournament will negatively impact Q4 2022 trading.

One day after the final last month, City Bet Club noted that there wasn’t a single day during the group stages that all favourites won their games, meaning that operators made early revenue gains. 

However, this had a negative impact that was not recognised at the time, as customer losses in the group stage meant that many did not return and ‘recycle’ their funds in the latter stages.

When comparing data from the Qatar event with the Euro 2020 tournament in June/July 2021, coupled with ‘word on the street’, City Bet Club believes that the outcomes do not ‘bode well’ for operators.

“I’ve been in the industry since 1976, and with 47 years in the game, this is by far the most pessimistic outlook for the health of the UK betting market that I’ve seen,” said David Brown, City Bet Club Co-Founder.

“While the World Cup may have seen record margins, word on the street is that turnover is significantly down compared to Russia 2018. Given that punters suffered many setbacks early in the Group Stage, the industry saw reduced recycling of customer money as bookie-friendly results continued throughout the tournament.”

  Customer losses and subsequent revenue decline were the first blow in a ‘triple punch’ to the industry – the second hit came in the form of the overhaul of the usual winter sports schedule, usually dominated by domestic competitions such as the Premier League. 

Looking at the matter again from a data perspective, the tipster stated that a like-for-like comparison to Euro 2020 will see an uplift of just 22% from Qatar 2022, partly due to the World Cup having 25% more matches as well as the absence of a competing summer racing programme.

Pointing to operator post-close results and reflections on the World Cup, City Bet Club cited Kindred’s recent update to investors, with the Unibet operator admitting to investors that its Q4 performance had fallen short of expectations.

Specifically, Kindred stated that a disruption of the Winter sports character (event?) resulted in a ‘25% reduction in top football league fixtures’ and in turn led to betting turnover declining, whilst World Cup wagering did not provide a bulwark.

“Traditionally a major football tournament and robust Christmas period, with a full program of racing, would normally put the big brands in very positive territory,” Brown continued.

“Currently – the silence says it all, and we’re yet to see comparisons of like-for-like turnover to the 2018 World Cup, which may infer all is not well.”

The final swing of the triple punch comes in the form of forthcoming regulatory changes and an apparent increase in the use of ‘intrusive’ affordability checks.

This has been highlighted in particular as an issue of concern for horse racing, a sport intrinsically linked with the betting space – the betting levy coming directly from bookmaker profits supports the sector financially. 

Affordability checks and the impact on horse racing has been an issue raised repeatedly throughout the course of the 2005 Gambling Act review, with some stakeholders claiming the sport could lose up to £60m a year as a result. 

City Bet Club added that the Arena Racing Company (ARC) estimates a UK digital betting turnover decline of £800m last year, with £40m in income lost from bookmakers, although declining attendance figures could also be a major factor in this.

Brown concluded: “Last but not least is the uncertainty around the government white paper on gambling, which is yet to go public. This has the potential to add even more challenges to the operation of the UK betting market. It will no doubt be a key decision on how the industry proceeds from here.”

Again citing operator post-close trading updates, City Bet Club looked to bet365’s last financial update showed an 88% decline in revenue due to overseas investment, which the  tipster believes is indicative that some firms no longer see the UK as a growth market. 

With the Gambling Act review apparently due in February – which would end a 26 month long process, faced with numerous delays – and a series of operator Q4 updates scheduled for publication, City Bet Club’s projections will be proven or disproven soon enough.

Check Also

SBC News World Cup: UKGC says betting to “add excitement” ahead of England final

World Cup: UKGC says betting to “add excitement” ahead of England final

As England takes on Spain in the Women’s World Cup final on Sunday, the UKGC …

SBC News Virgin Bet renews Ayr Gold Cup sponsorship

Virgin Bet renews Ayr Gold Cup sponsorship

The management of Ayr Racecourse has announced that Virgin Bet will continue to sponsor the …

Kambi navigates cost-heavy 2022 to hit ‘all-time high’ €166m revenue

Kambi navigates cost-heavy 2022 to hit ‘all-time high’ €166m revenue

Kambi has its 2027 financial targets in its sights after recording a strong close to …