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The gambling industry is international; headquarters are based in low-tax and low-regulation countries, and online operators have global customers. The UK is strategically important, not only as a source of income but also for the unique and global exposure of its sports, particularly Premier League Football. Moreover, advertisement through football club sponsorships can reach millions of fans in countries where gambling may be prohibited. Hence, many of these UK-based gambling corporations have huge worldwide influences.
Summary
The gambling industry is an international one; company headquarters are commonly based in low-tax and low-regulation countries, and online operators often have customers worldwide. The UK is not only strategically valuable as a source of income for operators, influence as an example of a liberalisation case-study, but it also boasts a unique global exposure of sports, particularly Premier League Football. Interestingly, despite the industry being critical of non-regulated brands in the UK, many UK operators often profit from unregulated markets themselves. 138
Before December 2014, remote operators based outside of the UK were not required to pay UK gambling duty on profits made from UK residents. After being legally mandated to hold a UK license and pay UK gambling duty, the number of remote operators licensed more than doubled in a year.
The prohibition of gambling products remains in numerous countries such as Turkey and China. Top English football clubs, which have millions of fans in these countries, are closely involved in betting companies' promotional efforts, either through prominent shirt sponsorships, pitch-side advertising, and the direct use of player endorsements.
Countries in Africa, the United States, and Latin America provide growth opportunities due to increased digitalisation and legalisation. Many of the larger businesses dominating the global online gambling industry are UK-based, demonstrating the size and global influence of these operators.
What is known?
Football sponsorships
Premier League Clubs with an association with a betting brand in the 20/21 season (18 out of 20) 139
Team | Betting partnerships |
|---|---|
Arsenal | Sportsbet.io (official betting partner) |
Aston Villa | LT (sleeve sponsors) |
Brighton | betway (official betting partner) |
Burnley | LoveBet (shirt & sleeve sponsors), dafabet (other partner) |
Chelsea | |
Crystal Palace | W88 (shirt sponsors) |
Everton | Parimatch (shirt sponsors) |
Fulham | BetVictor (shirt sponsors) |
Leeds United | SBOTOP (shirt sponsors), bet365 (betting partner) |
Leicester United | Yabo Sports (official betting partner), Parimatch (official training kit partner), bet365, w88, betway (other partners) |
Liverpool | Draftkings (unknown partnership) 140 |
Manchester City | MarathonBet (training kit sponsors) |
Manchester United | Yabo Sports (official betting partner) |
Newcastle United | Fun88 (kit sponsors), Unibet (other partner) |
Sheffield United | |
Southampton | Sportsbet.io (shirt sponsors), Unibet (other partner) |
Tottenham Hotspur | William Hill (official betting partner) |
West Bromwich Albion | 12bet (sleeve sponsors), bet365 (other partner) |
West Ham United | Betway (shirt sponsors) |
Wolverhampton Wanderers | ManBetX (shirt sponsors), bet365 (other partner) |
International gambling brands based in the UK
SportPesa (based in Liverpool)
Arsenal sent its former star, Sol Campbell, to Nairobi for children's coaching sessions with SportPesa 141
Took £1.15bn in revenue from Kenya (95% of its total global income) 142
Hull City players went to a Nairobi shanty town, where they handed out SportPesa branded wristbands and football strips to schoolchildren 141
Families watch television adverts featuring Arsenal, which is sponsored by a betting firm. The slogan is "They play, you win” 143
Editec (based in London) 141
Trades in Kenya as PremierBet, made pre-tax profits of £17m on a turnover of £51m in 2017, almost entirely from Africa
The “casino” section of PremierBet’s Kenya website includes a number of cartoon-character gambling games that appeal to children. They have names such as Lucky Pirates, fronted by a friendly toucan; Spellcraft, with smiling witches; and Rainbows
In Cameroon, PremierBet has sponsored a school with its corporate logo on the wall
An example of how gambling companies operate in black markets without licenses
Bet365, like others, operates in many countries where it does not have a license 144
Important betting markets where Bet365 is available include:
Australia,
Austria,
Argentina,
Bulgaria,
Canada,
China,
Croatia,
Denmark,
Germany,
Great Britain,
Hungary,
Iceland,
Ireland,
Italy,
Norway,
Russia,
Spain,
Sweden and
Switzerland
Countries that Bet365 is licensed in as of Q4 2019:
Australia,
Denmark,
Gibraltar,
Great Britain,
Italy,
Malta, and
Spain
Number of licensed gambling operators in the UK
Number of licensed gambling software operators 102
2013: 96
2014: 89
Prior to November 1st 2014, online operators were not required to have a Great British Gambling Commission licence and did not have to pay UK betting duty taxes)
2015: 216
2016: 241
2017: 254
2018: 299
2019: 314
2020: 321
Number of licensed remote casino, betting, and bingo operators 102
2013: 182
2014: 173
Prior to November 1st 2014, online operators were not required to have a Great British Gambling Commission licence and did not have to pay UK betting duty taxes)
2015: 499
2016: 506
2017: 528
2018: 608
2019: 626
2020: 596
A few of the UK’s largest gambling businesses, where they are based, and subsidiary trading names 145
888 Holdings PLC: Gibraltar: (Market Cap: £1bn, Great British remote license from 1st November 2014)
888 UK Limited: Gibraltar
777.com, 888.co.uk, 888.com, 888.info, 888bingo.com, 888casino.com, 888ladies.com, 888poker.co.uk, 888poker.com, 888poker.net, 888pokercam.com, 888pokeruk.com, 888responsible.com, 888sport.com, 888vipcasinoclub.com, angrybingo.com, bbqbingo.com, beatlebingo.com, betyoucan.com, bingoappy.com, bingoballroom.com, bingofabulous.com, bingohearts.com, bingohollywood.co.uk, bingohollywood.com, bingostreet.com, casino-www.888poker.com, casino-www.888sport.com, celebbingo.com, citybingo.com, costabingo.com, costagames.com, daisybingo.com, dinobingo.com, fancybingo.com, frozenbingo.com, giantbingo.com, magic888casino.com, monkeybingo.com, online-casino.com, play-www.777.com, poshbingo.co.uk, redbusbingo.com, riobingo.com, seasonbingo.com, singbingo.com, snowybingo.com, sparklybingo.com, tastybingo.com, treasurebingo.com, trexbingo.com, winkbingo.com, winkbingo.net, wishbingo.com, www.888poker-promotions.com, www.bigteasebingo.com, www.bingoloft.com, www.bringobingo.com, www.crocodilebingo.com, www.deepseabingo.com, www.easterbingo.com, www.fantasticspins.com, www.farmyardbingo.com, www.farmyardbingo.info, www.jinglebingo.com, www.kingdomofbingo.com, www.realdealbingo.com, www.rewindbingo.com, www.scarybingo.com, www.skyhighslots.com, www.slotcrazy.com, www.snowybingo.com, www.spybingo.com, www.sweetshopbingo.com, www.winkslots.co.uk, www.winkslots.com, www.winkslots.net, www.winkslots.uk
William Hill: England (Market Cap: £3bn, Great British remote license from 1st November 2014) purchased by Caesar’s Entertainment (USA) for £3bn due to be concluded in April 2021
WHG (International) Limited: Gibraltar
www.williamhill.com
Mr Green Limited: Malta
www.mrgreen.com
Bet365: England (Market Cap: £5bn, Great British remote license from 1st November 2014)
Hillside ENC: Malt
bet365.com
Entain plc: Gibraltar (Market Cap: £9bn, Great British remote license from 1st November 2014)
LC International Limited: Gibraltar
betdaq.com, bwin.com, cheekybingo.com, coral.co.uk, foxybingo.com, foxygames.com, galabingo.com, galacasino.com, galaspins.com, gamebookers.com, ladbrokes.com, partycasino.com, partypoker.com, sportingbet.com, sportingbet.uk
Flutter Entertainment: Ireland (Market Cap: £29bn, Great British remote license from 1st November 2014)
PPB Entertainment Limited: Malta
www.betfair.com, www.paddypower.com
Stars Interactive Limited: Isle of Man
www.betstars.uk, www.fulltilt.uk, www.pokerstars.uk, www.pokerstarscasino.uk, www.uk.fulltilt.com
FanDuel Limited: USA
www.fanduel.com
Bonne Terre Limited: England
www.skybet.com, www.skybingo.com, www.skycasino.com, www.skypoker.com, www.skyvegas.com
Kindred Group: Gibraltar (Market Cap: £34bn, Great British remote license from 1st November 2014)
32Red Limited: Gibraltar
32red.com, 32redbingo.com, 32redpoker.com, 32redsport.com
Platinum Gaming Limited: England
touch.unibt.co.uk, www.unibet.co.uk
Taxes paid and taxes avoided by the gambling industry
Kindred Group
32 Red, which is based in Gibraltar, paid just £812,000 in corporation tax in the ten years to 2016 – an effective tax rate of 3 per cent 146
Entain plc (formerly GVC)
2017 147
UK
corporation tax: £14m,
business rate & other taxes: £34m
betting duties: £396m
employer national insurance: £37m
irrecoverable VAT: £72m
Foreign
taxes: £244
2019 148
UK
corporation tax: £-17m
business rate and other taxes: £29m
betting duties: £393m
employer national insurance: £34m
irrecoverable VAT: £68M
Foreign
taxes: £420m
What the industry said?
William Hill PLC Annual Report 2019 149
"The US remains our most significant near-term opportunity. As we continue to hold leading positions in existing states, and work to launch in newly accessible states, the complexity of our US business"
William Hill identifies to shareholders that the US represents the source of the most significant growth in the near-term due to online sports betting's legalisation.
Kindred 146
“Kindred Group and all our brands – including 32Red – pays all taxes required in every market we operate including the UK.”
Kindred states that they pay all their taxes required but omits the concern that UK corporation tax is being avoided and instead corporation tax is being paid in low tax and low regulation countries.
GVC (Entain Group) 146
“GVC is a global business. Nevertheless, group companies paid more than £2.5billion of UK taxes from 2015 - 2019, making it one of the top 20 largest taxpayers in the country.”
GVC had conveniently reported figures from 2015 when remote operators had to register for a license and could no longer avoid UK betting duties and UK corporation tax. Businesses like GVC still benefit from their offshore bases by avoiding UK corporation tax in place of lower rates in Gibraltar.
Bet365 150
“A geographical analysis of turnover has not been given, as in the opinion of the directors, such a disclosure would be severely prejudicial to the interests of the group”
Bet365 is primarily owned by the Coates Family (93%) and a minority stake owned by Will Roseff (7%). A lack of investors means that Bet365 has no need to be transparent about risks and opportunities, and thus, it refuses to identify the significance of its revenues from ‘black-market’ regions.
Michael Dugher 12
“Unfortunately, in the same way that it is true that regulated betting employs 100,000 people and pays around £3 billion in tax, none of this evidence suits the anti-gambling lobby.”
Dugher refers to the levels of employment and tax revenue provided by regulated betting. Ironically, Dugher is keen to avoid discussion of the harms caused by gambling to society and the scale of tax avoidance on the part of gambling companies
Sam Chibambo, Premier Bet (Editec) Sales Manager 151
“We are here to change people’s lives. With little money, one wins huge amount of money. I can only encourage people to visit our shops and our agents to place their bets. They can also bet online.”
A sales manager for a UK-headquartered operator with customers in Africa encourages the idea of gambling to achieve a better life.
Fady Younes, Malawi Marketing Manager of Premier Bet (Editec) 141
“We hope that everyone who places bets will win up to 20m [kwacha — about £21,000].”
A marketing manager for another UK-headquartered operator with customers in Africa, disingenuously implies that the operator hopes that everyone will win a small fortune.
Mor Weizer, CEO of Playtech 152
“Being too focused on regulated markets actually comes with a lot of risks, not just rewards. There is a balance companies, bookmakers and operators – definitely the pan-European ones – need to maintain between unregulated and regulated income streams.
It is extremely important to enjoy the benefits of operating in certain unregulated markets, generating income that can then be deployed in the same markets as they become regulated, and in other markets where online gaming is already regulated.”
Weizer highlights the strategic importance of unregulated markets', recommending that operators involve themselves as part of the black-market.
GVC 153
“Unregulated gambling markets in Asia and North America make up a big portion of the global online gaming market. About 4% of the company's revenue currently comes from these markets, and GVC said by the end of the year the number would be cut to 1%.”
Interestingly, 4% of GVC’s revenue in 2020 was accrued from black market gambling in Asia and North America. The 4% is relatively higher than the 1.2% valuation of the black market in the UK, which is so often proclaimed as the bogeyman of gambling in Britain.
Shay Segev, CEO of GVC 154
“making great progress towards being the leading operator in the US.”
Segev reports on the growth opportunity of the US and customer acquisition efforts in a recently legalised market.
Philip Bowcock, CEO of William Hill 155
“Just one year on since PASPA [Federal Ban on Sports Betting] was overturned William Hill has doubled the sports wagering it handles in the US, seen record performances at the Super Bowl and March Madness, is live in all seven states to have allowed sports betting and expects to enter further states soon, with Indiana and Iowa the most recent states to pass bills to legalise sports betting.”
Bowcock reports on the success of expansion to the US as sports betting becomes legalised.
References
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