Online Bingo Key Moments
Bingo’s Transformation through the Years
The first bingo websites were launched in 1996 and while back then no one could have predicted the popularity this phenomenon would gain, as the internet caught on, the convenience of playing online took players away from land-based halls. While this lead to the closure of bingo premises across the country, in the years to follow it would actually revive the whole bingo industry, as online bingo halls attracted new younger and tech-savvier audiences. In 2017, we saw the number of land-based halls increase for the first time in years.
Under this act, bingo was now officially a legal form of gambling and the number of members across UK bingo venues grew rapidly to ultimately reach 14 million memberships in 1963, with as many as 150,000 customers visiting daily Mecca Bingo’s shops. In the 1980s there were an estimate of 1,600 bingo halls but with the advent of the internet and bingo sites opening online in the 1990s, purpose-built halls openings came to a standstill. The decline continued throughout the 2000s and 2010s and when a bingo venue opened in 2016, it was the first in seven years. But it wasn’t the last one and in March 2018, there were 649 land-based bingo halls – 13 more than in March 2017.
Gross Gambling Yield
Bingo sector GGY remains steady at £687m, 46.3% of which is derived from machines
Licenses Issued by the UK Gambling Commission
The Gambling (Licensing and Advertising) Act 2014 added several provisions to the Gambling Act 2005 and required that remote operators (those operating outside of Great Britain) hold a UK operating license in order to provide gambling services and advertise to British customers. Another requirement was that they pay gambling duty on UK revenue in Great Britain, regardless of where their operation is based.
Legislation and Regulation
The Online Gambling Industry Faces New Taxes and Content Limitations
2017 was predicted to be the year of legislation and regulation for remote gambling and even though a snap election put legislation changes on hold for the first half of the year, in August a levy on bonuses was introduced after the UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC) implemented new regulations. With operators having to pay 15% general duty on all free or discounted online bets, the first casualties of the Finance Bill 2017 were the no-deposit bonuses. And that was just the start.
Following a recent EU directive, companies across the continent are now similarly banned from adding surcharges.
According to a UKGC report on young people and gambling 25,000 children aged between 11 and 16 were problem gamblers. With concerns about the growing number of children gambling in a “consequence-free environment”, operators could no longer display “child-like in nature” cartoon characters – whether their mascots or characters from slot games – on their websites or third-party media. According to the Commission, “the use of particular colours, cartoon and comic book images, animals, child- and youth-orientated references and names” could appeal to under-18-year olds.
New Sites in 2017 and 2018
Site Closures in 2017
The regulation and legislation changes of 2017 have had a palpable impact on site closures. 55 sites shut down for good compared to just 20 in the previous year. Almost half of them closed their virtual doors in the months after the Finance Bill was passed, a clear indication that the new tax on bonus funds has had a major impact on online bingo operators. Cashcade was acquired by GVC holdings in February 2017, and some of the changes that the company underwent included the closure of 11 sites and signing an endorsement deal with a Hollywood actress who replaced the famous cartoon fox mascot of Foxy Bingo.
Bingo Networks are Changing Their Business Strategies to Better Meet Both Customer Demand and Regulations
Dragonfish holds its undisputable position of an online bingo behemoth for yet another year as it supplies the software for almost half of all active websites and has also launched the biggest number of new sites in 2017 and the first half of 2018. It changed its bonus offers, removing wagering requirements, and now focuses heavily on customer retention with its Joy Gem Club that encompasses the biggest bingo sites in the network. Despite losing its no-deposit bonuses and recognizable mascots and having its position in the white label sector destabilised, Cozy is still staying ahead of competition holding 25% of the active bingo sites.
DESPITE CEASING TO OPERATE THE SUN BINGO AND FABULOUS BINGO WEBSITES IN AUGUST
2016, GAMESYS REPORTED A 9 PER CENT INCREASE IN TURNOVER TO £230.7M FOR THE
YEAR ENDED MARCH 31ST, 2017.
Industry Predictions for 2018
The Online Bingo Industry in the UK Will Face More Changes
Further sustainable growth is not impossible despite all the obstacles the industry has to face. The presence of active online bingo sites remains stable and we’re expecting to see more sites open in the second half of 2018 and in 2019, but with the regulatory and financial squeezes, it’s also likely that some of the ‘coming soon’ sites may never see the light of hosting or that more sites, especially owned by individuals, may close in 2018.
While operators may have breathed a sigh of relief and enjoyed a break from the welcome bonus competition, it’s a thin line between market consolidation and stagnation, as the only new networks expected to diversify the online bingo scene – Mr Q and Yggdrasil are still postponing the launch of their “cutting-edge game-changing” products.
We’ve already seen some of the biggest brands in the iGaming industry fined by the UK Gambling Commission in the beginning of 2018, so we can only expect UK operators to get even more heat by the Commission, the Advertising Standards Agency (ASA) and other regulatory bodies. In 2017, 888 were hit with a record fine of £7.8 million for failing to protect vulnerable clients.
OPERATORS WILL BE CLOSELY WATCHED FOR SELF-EXCLUSION PRACTICES AND
INFORMATION THEY SHARE WITH CUSTOMERS ON DIFFERENT CHANNELS.
In October 2017, the Committee of Advertising Practice, the Advertising Standards Authority, the Remote Gambling Association and the UK Gambling Commission jointly issued a letter that emphasised the importance of existing regulatory frameworks and the need for removing or amending child appealing content from operators’ websites and third-party media like the App Store, affiliate sites, and social media.
Although the letter didn’t set any clear requirements, it urged operators to hide child-like in nature characters, animations, and product names reflecting or being associated with youth culture behind age-verification wall and remove them from freely accessible space like the homepage of their website and search engine advertising. Game providers will rightly clamp down hard on all operators using their games in the UK, specifically on pre-age verification demo games.
Considering the graphics and texts on most slot games, some experts predict that somewhere between 30% and 50% of the current slot games could get banned as demo games in 2018. So far, no certain games have been banned but considering the warnings about more fines and the content on already flagged games, it is not a stretch to assume that a list of games banned from demo versions or being generally available to view is in the making.
So far, the current UK conservative government hasn’t been exactly gentle on the gambling industry and that coupled with the fact that the current UK Prime Minister introduced the UK point of consumption tax when she was Home Secretary, plus all the regulations and limitations from the Gambling Commission, ASA and CAP could only mean more and tighter controls on bingo operators and affiliates. Some industry experts have even speculated that the PoC tax could increase from 15% to 20%, even 25% in 2019.
The UK’s pull-out from the EU is scheduled to happen by the end of March 2019 and based on the conditions it manages to negotiate, particularly with Spain over Gibraltar, Brexit may have a negative effect on the operators and affiliates in the iGaming and gambling industries in the UK if EU member states decide to restrict or block UK-licensed operators. It’s possible that some other EU member states will start to regulate their markets further and follow suit by introducing stricter regulations, governing advertising copy and encouraging responsible gambling from operators and affiliates.
Even though 2017 has been eventful with newly imposed financial and advertising limitations, bingo operators have been able to weather the economic downturns and regulatory frameworks much more successfully than their iGaming counterparts. Online bingo is as reliant on player liquidity as online poker for example but because of the social aspect of the game and the regional nature of bingo rooms, the best online bingo sites manage to build their players into communities, despite the need for liquidity. Live chat hosts, live caller games, fun content and challenges enhances player engagement as they play well in social media which is steadily becoming a key marketing venue for online bingo.
Read the Terms and Conditions of bingo websites carefully. Check the license of the website and only provide your financial information and personal details to secure sites.
Get your sites checked and authorised by the ASA and CAP’s Copy Advice team, so that you are confident all offers are valid, and your website is perfectly compliant.
Give players what they want: clear T&Cs, no-wager bonuses, and more retention offers. Make sure your site is compliant with the requirements of the UKGC, ASA, and CAP.